Despite speculation and Intel's declining market capitalization, Broadcom's CEO Hock Tan has stated that the company has no interest in acquiring Intel. According to Tan, no one from Intel has approached Broadcom with an offer.
No Hostile Takeover
In an interview with the Financial Times, Tan explained, "[Broadcom has] not been asked [to take over Intel]...I can only make a deal if it is actionable. Actionability means someone comes and asks me. Ever since Qualcomm, I learned one thing: no hostile offers." This references Broadcom's failed $142 billion hostile takeover attempt of Qualcomm in 2018, which was ultimately blocked by the U.S. government.
Earlier this year, there were rumors of Qualcomm potentially acquiring Intel, but these plans reportedly fell through.
Strategic Alignment and Challenges
A merger between Intel and Broadcom would align with industry trends, given Broadcom's focus on AI processors and data center solutions, and Intel's dominance in server and PC CPUs. However, Broadcom lacks a presence in the PC market and doesn't supply server CPUs.
Intel's production scale and presence in client PCs could be attractive. However, Intel's struggling to keep its processor technologies competitive with TSMC and its products competitive with AMD. This makes Intel a less attractive target. Furthermore, Broadcom is also busy with the integration of VMware, which it acquired for $61 billion in 2022.
Focus on Custom AI Processors
Broadcom is currently focusing on developing custom processors for major tech companies like ByteDance, Google, Meta, and reportedly Apple and OpenAI. These companies are seeking alternatives to NVIDIA's processors for AI applications. Tan predicts that AI projects for Broadcom's clients could require clusters with up to one million processors.
"I can only make a deal if it is actionable. Actionability means someone comes and asks me. Ever since Qualcomm, I learned one thing: no hostile offers." - Hock Tan, Broadcom CEO
