Hock Tan, CEO of Broadcom Inc., the $1 trillion chipmaking giant, has ruled out any interest in acquiring the struggling Intel Corp., citing his focus on transforming Broadcom into a leader in artificial intelligence. Tan stated that the company’s efforts are firmly directed at expanding its presence in the AI chip sector, a space currently dominated by Nvidia Corp.
Tan remarked that Broadcom is dedicating substantial resources and attention to increasing its AI chip market share and clarified that no one has approached him to bid for Intel. He also dismissed the idea of pursuing a hostile takeover, referencing Broadcom’s failed 2018 attempt to acquire Qualcomm Inc., which was blocked by then-President Donald Trump over national security concerns. Since that episode, Broadcom has shifted its headquarters to the United States and adopted a different approach to acquisitions.
The CEO explained that Broadcom now engages in acquisitions only if they are “actionable,” meaning they arise from mutual interest. Reflecting on past experiences, he emphasized his aversion to hostile bids, noting that the Qualcomm episode taught him to avoid such strategies altogether.
The contrasting fortunes of Broadcom and Intel illustrate the shifting dynamics in the semiconductor industry. Broadcom has thrived amid the rise of generative AI, with its market capitalization more than doubling to $1.03 trillion this year. Its most recent earnings report revealed a 220% year-over-year increase in revenues from AI chips, fueled by its custom AI chip designs and AI infrastructure components for data centers.
Meanwhile, Intel has struggled to stay competitive in the AI space. Its Gaudi AI accelerator chips have failed to gain traction against Nvidia’s popular graphics processing units, contributing to Intel’s steep decline in market value, now at $82 billion—less than half its previous valuation.
Intel’s woes were compounded earlier this month when CEO Pat Gelsinger unexpectedly announced his resignation. Reports suggested the decision was influenced by Intel’s board of directors following a series of setbacks. Gelsinger, who rejoined the company in 2021, had launched an ambitious turnaround plan focused on revamping Intel’s manufacturing and design operations. However, the strategy failed to deliver results, with Intel posting its largest-ever quarterly loss in October.
In addition to financial struggles, Gelsinger’s tenure saw significant workforce reductions, with around 15,000 job cuts announced in August and the suspension of dividends to shareholders. As a result, speculation has grown around the possibility of Intel being acquired or divesting parts of its business. However, interest from potential buyers, including Qualcomm, appears to have waned.
Broadcom’s firm stance against acquiring Intel underscores its determination to build on its current momentum and solidify its position as a leading player in the AI chip market.
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