Last week, it was reported that $Qualcomm (QCOM.US)$ has been in talks with $Intel (INTC.US)$ and discussed acquiring intel, which could potentially be one of the largest M&A deals in the technology industry history.

JPMorgan analysts believe that if the deal goes through, it will make Qualcomm a dominant player in client computing, automotive computing chips, and datacenter CPU fields. However, it will also impact the Asian technology supply chain. In the future, if Qualcomm allocates chip orders to Intel, it will pose significant risks to chip foundries represented by Samsung.

Qualcomm will ascend to the throne of overlord.

JPMorgan analysts Gokul Hariharan AC, Robert Hsu, and Lakshya Jain stated in a report on September 23 that currently, Qualcomm is the market leader in the mobile computing field, while Intel dominates the PC and server CPU markets.

If the two companies merge, they would form a giant with the highest market share in the PC CPU, smart phone system chip, and datacenter CPU markets, and with a majority stake in Mobileye, they would have a strong market position in the advanced driver-assistance systems (ADAS) and autonomous driving technology sectors.

In addition, Qualcomm is already a leader in automotive infotainment, connectivity, and intelligent cockpit solutions, with over $45 billion in order backlog.

JPMorgan stated that such a merger would give Qualcomm greater bargaining power in the Asia semiconductor supply chain, which the market may see as a "threat" to the Asia technology industry chain, especially against the backdrop of Qualcomm's ARM architecture not making waves in the PC market. This acquisition would help Qualcomm achieve a leading position in the PC CPU market.

Intel's foundry future is uncertain, putting pressure on Taiwan Semiconductor.

Analysts also pointed out that the impact of Qualcomm acquiring Intel on its foundries is still unclear.

Qualcomm has always been a fabless company, and operating a leading foundry may require massive capital investment. If Qualcomm spins off Intel's foundry as an independent entity, while ensuring a large number of orders are guaranteed. Analysts believe that this could be bearish. $Taiwan Semiconductor (TSM.US)$ Analysts believe it would be unfavorable.

It is worth noting that Intel lacks experience in low-power technology and currently relies mainly on TSMC's N3 technology to produce the upcoming Lunarlake mobile processor. Qualcomm has also used TSMC and Samsung in the past, but due to issues with Samsung's foundry process improvement, in recent generations of products, it has decisively shifted to TSMC.

The report points out that Qualcomm may not be able to transfer wafer foundry orders in the short term, especially because the successful process upgrade is crucial for maintaining competitiveness in the PC and smart phone sectors, especially in fierce competition with rivals such as Apple, AMD, and MediaTek.

"Disastrous" blow to Samsung

Analysts believe, for $SAMSUNG EL 144 (SSNGY.US)$ In terms of impact, Qualcomm's acquisition of Intel may pose more serious potential risks. JPMorgan indicated:

"Qualcomm has always been Samsung's major customer for new process technologies. If Qualcomm allocates wafer foundry orders to Intel foundries and TSMC in the future, this will pose significant risks to Samsung's leading wafer foundry target market."

For companies like MediaTek and Asia without wafer fabs, JPMorgan pointed out that as competitors grow in size, Qualcomm may also weaken some smaller businesses such as connectivity, RF, etc., creating new opportunities for them.

Editor/Emily