The semiconductor industry may be facing a major change, as news emerges that the once world-leading chip giant is rumored to be "selling its assets".

According to US media reports, the two chip giants Qualcomm and Intel have recently been in talks about an acquisition, which could become the largest and most influential M&A deal in the tech industry.

As a result, during regular trading hours on Friday, Intel surged nearly 9.5%, while Qualcomm briefly fell more than 5.5%. At the close, Intel was up 3.31% and Qualcomm was down 2.87%.

Since the beginning of this year, Intel's stock price has dropped nearly 56%, with a market cap of $93 billion, while Qualcomm's stock price has risen 60%, with a market cap of $188 billion, roughly double that of Intel.

Intel's downhill trend

Acquiring Intel was unimaginable ten years ago.

Once the dominant force in the semiconductor industry, Intel has a market cap that once exceeded $290 billion. It has played a significant role in both the PC and chip sectors in the semiconductor history.

But in recent years, Intel's strength has greatly declined and it has been in a deep development crisis.

Not only has it lost its manufacturing advantage to chip foundry competitors like Taiwan Semiconductor, but it has also missed out on the artificial intelligence boom led by Nvidia and AMD on Wall Street.

Currently, Intel is going through a difficult time.

In August of this year, Intel released a poor quarterly financial report.

The financial report showed that Intel's second-quarter revenue this year was $12.833 billion, lower than the $12.949 billion in the same period last year, a nearly 1% year-on-year decline; net loss was $1.61 billion, a year-on-year change from profit to loss.

In order to save costs and turn around losses, Intel's CEO at the time, Pat Gelsinger, announced that the company would stop all non-essential work and announced the divestment of its chip manufacturing business.

To this end, Gelsinger has formulated a roadmap to cut costs by over $10 billion by 2025. At the same time, Intel announced that it would lay off over 15% of its workforce, about 15,000 employees.

This year, it will reduce capital expenditures by more than 20%. By 2026, Intel will reduce research and marketing expenses by billions of dollars annually.

In addition, earlier the company announced other measures, including plans to suspend the establishment of new factories in Germany and Poland.

The acquisition plan comes at a time when Intel is facing one of the most serious crises in its half-century history.

Can Qualcomm handle it?

Earlier this month, Qualcomm was reportedly exploring the possibility of acquiring part of Intel's design business.

Both Qualcomm and Intel are major chip manufacturers in the United States, competing in multiple markets, including PC and laptop chips.

But the difference lies in their business models.

Qualcomm designs chips using the intellectual property licensed from Arm Holdings and outsources their manufacturing, while Intel relies mainly on its own architecture and is one of the few American chip manufacturers to produce their own chips.

If this merger deal is eventually reached, it will be one of the largest technology mergers in history.

Qualcomm may also gain its own production opportunities in the United States and become the largest brand in the PC and traditional server computer market.

However, the transaction is still far from being finalized.

According to insiders, Qualcomm has not formally made a takeover offer to Intel, and there are still significant obstacles to reaching a deal.

Given the large scale and national security importance of these two chip companies, even if Intel is willing to accept, a deal of this magnitude will certainly attract strict antitrust scrutiny.

However, the deal between the two parties could also be seen as an opportunity to enhance the competitiveness of the US chip and semiconductor industry.

It is currently unclear whether regulatory agencies will allow Qualcomm to acquire Intel without acquiring its troubled foundry business, and it is also unclear whether Qualcomm is willing to take on this complex task.

In order to complete the deal, Qualcomm may intend to sell Intel's assets or part of its business to other buyers.

Currently, both companies have not responded to this.