Qualcomm is considering buying Intel, but analysts see major obstacles

While buying Intel would help Qualcomm diversify its product offering (80% of its revenue comes from the smartphone market) by entering the PC and data center markets, Qualcomm lacks the experience to offset the weakness of Intel’s prowess .

Intel fabs, the industry term for semiconductor factories, are the biggest problem in its portfolio. As Intel’s hold on them weakened, competitors like TSMC rose to dominate high-end chips.

Rasgon and his team wrote that Intel is having “enough trouble” managing its manufacturing plants on its own.

“We don’t think anyone else would really want to run them, and we think scrapping them is unlikely to be politically viable at this point,” Rasgon wrote. Intel’s factories are politically valuable because some are in the US – Arizona, Oregon and New Mexico to be exact. Maintaining US semiconductor manufacturing is a matter of economic and national security.

This has led to some speculation that Qualcomm would immediately sell the factories in the event of an acquisition. Rasgon wrote earlier this month that Intel’s manufacturing business “cannot stand on its own right now given the heavy losses and lack of scale.”

However, the analyst questioned whether Intel was in such bad shape that this “fire sale” was necessary.

“Is Intel desperate enough to seriously consider something like this? We’re not so sure,” said Rasgon and team.