Qualcomm is humming. The semiconductor company’s market value has risen 50% this year to around $190 billion, and the wireless company’s businesses should generate $11 billion of excess cash for its fiscal year, which ends in September. Now it’s mulling buying part, or even the whole, of Intel. Intel’s size and the scope of its problems make it a tempting target for an ambitious buyer, and a deal may offer some protection from big challenges, such as a showdown with Apple. But even mulling such a risky deal shows Qualcomm’s weaknesses. Qualcomm’s main division designs chips for handsets, cars, and other devices, which

The trillionaire club is growing quickly. Six years ago, Apple became the charter member, not long before oil titan Saudi Aramco publicly debuted with a 13-digit market capitalization. Few would have predicted five more inductees so soon, and investors are nudging even more companies to join. Chipmaker Broadcom is riding an artificial intelligence wave just like Nvidia, Microsoft, Amazon.com, Alphabet and Meta Platforms. Eli Lilly is on its way thanks to the anti-obesity craze. Hyped megatrends sparking giddy valuations, however, will inevitably lead to disappointment. Broadcom, under boss Hock Tan, has been expanding by acquisition. It bought several rivals before paying almost

Tech giants spending heavily on artificial intelligence will also need to invest in legal advice. Technology is full of natural monopolies, and computers that simulate human intelligence may be no different. That’s the hope of companies seeking to establish profitable empires, and the fear of regulators which prefer to act quickly to stop abusive actors from snuffing out competition. But the Federal Trade Commission may loom larger for Microsoft’s legal team than the Department of Justice will for Nvidia. The government agencies have divided up responsibility for leading investigations of the companies, the New York Times reported on Wednesday, citing two people

The semiconductor industry has changed immeasurably since Japanese conglomerate SoftBank Group bought Arm for $32 billion in 2016. Yet the British chip designer’s fair value may be in that same ballpark, according to a Breakingviews valuation. SoftBank said on Tuesday it was seeking an equity value of $50 billion to $54 billion as part of the roadshow for Arm’s initial public offering, factoring in shares issued to employees that are yet to vest. When the Japanese conglomerate’s boss Masayoshi Son scooped up the Cambridge-based company seven years ago, he was placing a bet on the so-called Internet of Things, the view that

Nvidia has made a boisterous entry to the $1 trillion club, but it might not remain there for long. The chipmaker on Tuesday joined Apple, Alphabet, Amazon.com and Microsoft in the elite gang of firms with a thirteen-digit market capitalization. But given its fast and choppy ascent, Nvidia’s experience might prove more like that of electric-vehicle maker Tesla, which crashed the mega-stock party, only to find itself out on the curb not long after. While Nvidia has been around for ages – it was founded in 1993, making it older than Amazon and Alphabet – its valuation growth of late

Emerson Electric is trying out some new M&A tools. It disclosed on Tuesday an unsolicited $6.9 billion offer for NI, which makes testing devices and software for the semiconductor and aerospace industries, in an effort that assesses the utility of aggressive deal measures. After a quiet standoff with Emerson, the company formerly known as National Instruments said on Friday that it was examining its strategic options and had implemented a poison pill. Then, newish Emerson boss Lal Karsanbhai let investors know about the $53 a share offer, which started back in May at $48. Emerson is remaking itself under Karsanbhai. In October,

The Russia-Ukraine conflict and the subsequent western sanctions on Russia  have strengthened the determination of President Xi Jinping’s administration to make China more self-sufficient in vital supply chains over the next few years, a goal which is reiterated in the Chinese Communist Party’s latest Five-Year Plan. Beijing is therefore investing $150bn in expanding and improving its domestic production of semiconductors, a product used in all modern electronics and essential to national security. China’s desire to reduce its heavy reliance on imported chips is reflected in the recent increase in its domestic production of semiconductor integrated circuits, which at its peak

Broadcom’s creep from semiconductors to software was already quizzical, given the scant overlap between making chips and coding bits. With the $61 billion purchase of VMware, the fog gets thicker. It doesn’t help that Hock Tan, who runs the $220 billion chipmaker, is being vague about the benefits of this giant deal on which shareholders get no real say. Acquisitive companies tend to give a clear figure on the savings a tie-up will create – as Broadcom has too in some past deals. In announcing the VMware tie-up on Tuesday, Tan said instead that software developer VMware should contribute $8.5 billion of EBITDA to

New lockdowns in the Chinese manufacturing hub of Shenzhen presage more supply disruptions for companies like Apple and higher prices for consumers. Past snafus are one of the reasons that U.S. inflation has surged to a four-decade high of nearly 8%. As items from electronics to cars become ever more expensive, or even unavailable, households will revert to pre-pandemic habits and focus their non-essential spending on services like restaurants and travel. In the past two years, cooped-up Americans bought more stuff. For example, spending on durable goods rose 14% in the fourth quarter of 2020 compared with a year earlier, according to

Intel has a tower to climb. Buying an Israeli chipmaker of that name is a literal but probably ineffective way to do it. Once the dominant cutting-edge chip firm, Intel has lost its technology lead. At the same time, the $200 billion company is undergoing a transformation as new-ish Chief Executive Pat Gelsinger attempts to turn it into a contract manufacturer for others’ products. As a statement of intent, Gelsinger’s $5.4 billion acquisition of Tower Semiconductor shows his seriousness about the latter challenge. But with a year or more until closing, Intel can’t bet on this deal to fix its flaws –

Intel has a new, old boss. Pat Gelsinger, returning this week to run the $250 billion company where he was the first chief technology officer, could change a few things, like separating chip design from production. Intel’s stock trades at a big discount to both peers that design processors like Advanced Micro Devices and specialists like Taiwan Semiconductor Manufacturing that make them. At least in theory, a split could double Intel’s market value. Intel already outsources roughly 15% of its manufacturing. Doing more of that would spare Intel’s design arm from limitations and delays in what its own factories can

Even Nvidia has limits to its supercharged growth. The $326 billion semiconductor firm is riding a wave of demand for its gaming and data center chips, and the pandemic has provided a bit of extra swell for both. But its suppliers are struggling to keep up, which not only limits its current potential. It puts future sales – and valuation – at risk, too. The company specializes in creating chips that do many simple tasks simultaneously. These have highly sophisticated uses, like making computer graphics more lifelike or helping data centers go through torrents of information. The result is steadily