Qualcomm Inc. has approached Intel Corp. to discuss a potential acquisition of the struggling chipmaker, people with knowledge of the matter said, raising the prospect of one of the biggest-ever M&A deals.

California-based Qualcomm proposed a friendly takeover for Intel in recent days, according to the people, who asked not to be identified discussing confidential information. The approach is for all of the chipmaker, though Qualcomm hasn’t ruled out buying or selling parts of Intel in a combination.

It’s uncertain whether the initial approach will lead to an agreement and any deal is likely to come under close antitrust scrutiny and take time to complete, the people said. Qualcomm has been speaking with U.S. regulators and believes an all-American combination could allay any concerns, they said.

Qualcomm is looking at Intel at a time when its smaller rival is in the midst of the most difficult period in its 56-year history. Under Chief Executive Officer Pat Gelsinger, Intel is working on a plan to reshape the company and revive its flagging share price.

While Gelsinger still believes the turnaround plan could be sufficient for Intel to remain an independent company, he is open to considering the merits of different transactions, the people said. Both companies will now assess various options with advisers, they said.

Intel’s shares have fallen about 37% over the past 12 months, giving it a market value of about $93 billion. Qualcomm’s stock has risen more than 50% over the same period for a market capitalization of about $188 billion. At such values, any deal between Qualcomm and all of Intel would rank among the largest on record, Bloomberg-compiled data show.

The Wall Street Journal reported Qualcomm’s interest on Friday, driving Intel’s shares up by more than 3%. Representatives for Qualcomm and Intel declined to comment.

While Qualcomm’s approach raises the prospect of others entering the fray, at least one large rival is opting to sit on the sidelines for now.

Broadcom Inc. isn’t currently evaluating an offer for Intel, people familiar with the matter said. The company had previously been assessing whether to pursue a deal, the people added.
Advisers continue to pitch ideas to Broadcom, the people said. A representative for Broadcom declined to comment.

Intel is headed toward its third consecutive year of shrinking sales, estimated to make $52 billion in revenue in 2024, just 70% what it brought in back in 2021. The stock did receive a bounce this week after the company made a raft of announcements that spurred optimism in Gelsinger’s turnaround plan.

In the most notable move, Intel struck a multibillion-dollar deal with Amazon.com Inc.’s Amazon Web Services cloud unit to coinvest in a custom AI semiconductor and outlined a plan to turn its ailing manufacturing business, or foundry, into a wholly owned subsidiary.

The decision to separate Intel’s foundry operations from the rest of the company is aimed in part at convincing prospective customers — some of whom compete with Intel — that they are dealing with an independent supplier. Bloomberg had previously reported that the company was weighing this option.
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