On September 24th, Caixin reported (Editor: Ma Lan) that on Friday of last week, Qualcomm was rumored to be considering acquiring Intel, thereby establishing a giant in the chip industry. This drove Intel's stock price up by over 3% on Monday, with many investors considering this deal a bullish move.

However, after careful analysis, analysts have expressed pessimistic views on this acquisition. Well-known electronics analyst Ming-Chi Kuo stated that if the merger really happens, it could be a disaster for Qualcomm.

Kuo pointed out that Qualcomm acquiring Intel would only help its AI computer chip business, and given the current situation, even without acquiring Intel, Qualcomm's growth in the personal computer field is inevitable. In addition, the acquisition will create immense financial pressure on Qualcomm and directly impact its profit-making ability.

This view is also echoed by peers. TECHnalysis Research founder Bob O'Donnell believes that the Qualcomm-Intel acquisition rumor is intriguing; from a pure product perspective, the acquisition does have its value because the two companies have multiple complementary product lines.

However, he emphasized that the actual likelihood of the acquisition taking place is very low, and Qualcomm is unlikely to fully absorb Intel, but more likely to detach Intel's continuously losing chip foundry business. But at present, this kind of detachment is not easy to accomplish.

In addition to these concerns, analysts also point out that Qualcomm's acquisition of Intel is very likely to trigger antitrust investigations, making it the biggest deal in the chip industry's history and creating a giant with significant market share in the smartphone, personal computer, and server markets.

Self-rescue turns into self-sabotage?

Insiders point out that as of June 23, qualcomm had about $7.77 billion in cash and cash equivalents, so if it wants to acquire intel, it may mainly use stock financing and other means, which would greatly dilute qualcomm investors' equity.

Acquiring the old giant intel may pose financial difficulties for qualcomm, causing its net profit margin to plummet from the current 20%, and even potentially result in losses. Therefore, many analysts hope that qualcomm will think twice before proceeding.

In addition, qualcomm has never operated chip factories, instead relying on partners such as taiwan semiconductor for production and receiving support from chip design companies like Arm. This means that qualcomm does not have the experience and expertise needed to drive intel's foundry business development.

Bernstein analyst Stacy Rasgon pointed out that intel's chip factories, especially those in the usa, have crucial political significance and are therefore unlikely to be abandoned. However, qualcomm does not have the ability to rescue these factories, so he does not believe qualcomm would be a better manager for intel.

Some analysts speculate that intel would prefer external financing over selling, such as its recent announcement to spin off its foundry business. In addition, there are reports that apollo global management has provided intel with a $5 billion investment proposal.

In short, wall street is currently not bullish on this deal between qualcomm and intel. For intel, qualcomm is not a good choice; while for qualcomm, intel may very well end up being unappetizing.