Lauren Thomas, Laura Cooper, and Asa Fitch, reporting for The Wall Street Journal:

Chip giant Qualcomm made a takeover approach to rival Intel in recent days, according to people familiar with the matter, in what would be one of the largest and most consequential deals in recent years.

A deal for Intel, which has a market value of roughly $90 billion, would come as the chip maker has been suffering through one of the most significant crises in its five-decade history.

A deal is far from certain, the people cautioned. Even if Intel is receptive, a deal of that size is all but certain to attract antitrust scrutiny, though it is also possible it could be seen as an opportunity to strengthen the U.S.’s competitive edge in chips. To get the deal done, Qualcomm could intend to sell assets or parts of Intel to other buyers.

Those attuned to the news of the past few years won’t find this particularly surprising because Intel has been on a steady, predictable decline for most of this decade; financial woes, fabrication worries, and the advancement of rivals like Apple, Taiwan Semiconductor Manufacturing Company, and Advanced Micro Devices have all led to Intel’s demise. But take a step back for a second: If, six years ago, this same news broke out, would anyone believe it? Of course not. Intel was sky-high and building good products that companies and consumers (mostly) loved. Intel, not too long ago, was the chipmaker, when AMD was known as the inferior brand and TSMC was only a fabricator for Arm-powered mobile processors. This news, in the grand scheme of the chipmaking business, is a huge deal — and should be surprising to anyone who looks beyond the short-term effects of a sale like this. The avalanche and subsequent erosion of Intel’s business began in 2020, when Intel was behind on its latest fabrication technology, lost the Apple deal, and was quickly eclipsed by AMD — but that’s all relatively recent history.

While Intel’s decreased market dominance and market share should be alarming signs for investors, developers, and the company’s clients, the plan for rebounding from the four-year disaster shouldn’t have included selling to Qualcomm of all companies. Qualcomm was known as inferior to practically every other chipmaker just a few years ago: It was losing majorly to Apple in the mobile processor market, and it could never keep up with Intel or AMD because Qualcomm processors are built on Arm, not x86, and Windows on Arm was a sad, forgotten relic. In the last year, that’s changed. Microsoft is building Copilot+ PCs with Qualcomm-made Arm chips, Apple silicon Macs have the best battery efficiency and performance in the laptop market, and TSMC is helping by launching groundbreaking 3-nanometer fabrication processes. The landscape has changed — Qualcomm has the edge and Intel is down in the dumps.

Qualcomm and Intel can coexist as competitors — and I think they should — but now the onus is on Intel to stop the bleeding, not Qualcomm to catch up. Six years ago, it was Intel that could’ve bought Qualcomm; now, it’s the opposite.

But here’s the case for why Qualcomm, now clearly with the upper hand strategically, should buy Intel: Remember what I said about Qualcomm having a moment this year? Windows on Arm is back and better than ever, now with real, native support from major software makers and Microsoft, as well as a “Prism” emulation layer that works fine. But still, the road is rocky — game support is nascent, if not entirely nonexistent; processor-intensive apps still run choppily; and the new software environment is minuscule compared to the hundreds of thousands of developers who make x86 Windows apps. I wrote earlier this year that now is the beginning of the end for x86 — and I still stand by that assertion — but on Windows, that transition is going to be slow, painful, and arduous. If Qualcomm buys Intel, it’ll inherit all of Intel’s designs since Intel Foundry is being spun off into its own business. Those x86 designs have kept Intel in the lead for years and are arguably what keep the company afloat today; the foundry, by contrast, is floundering. Qualcomm can continue to push its Arm processors while selling Intel ones as legacy, stop-gap solutions.

By owning the legacy x86 side of chipmaking and the new Arm side, Qualcomm will become the most dominant semiconductor design company in the world. For Qualcomm’s investors and leadership, now is the time to capitalize on Intel’s suffering. Intel is as cheap as it’ll ever be now that it has spun off Intel Foundry, and its stock price is in the dumps thanks to the constant cascade of bad news. Regulators are well aware of this plan, however, and will probably move to block it to prevent consolidation of arguably the most important technology industry. But maybe the Qualcomm and Intel marriage isn’t so bad, after all. It’s just a lot to take in.