Intels Bluff!

We just got busy with Intel’s indication that they could bid for the Broadcom, Qualcomm, NXP combination. We will update this article as our research progresses, but it is fair to say we have limited confidence in Intel’s interest in acquiring the combination. Intel has traditionally struggled with product and market areas that they could not grow to at least one B$/Qtr. Many product/market areas have been killed or sold off after a short period of intense investment.

We believe Intel is releasing the intention to bid as an attempt to prevent a third contender to the Semiconductor throne behind Intel and Samsung. The main problem for Intel is that it is the market leader in the fastest growing semiconductor market: The Cloud and Datacenter market – but Intel is not growing much compared to Nvidia and Samsung. Intel is not a leader in AI that now includes good memory solutions.

 

Revenue and Growth rates

If you are a reader of this blog, you know that we believe the acquisition that will match Intel’s strategy perfectly is Micron. The DRAM has gone from a commodity in the PC to a vital component in Artificial Intelligence in the Cloud datacenter, which is Intel’s target market number 1.

 

 

 

Intel is seeking meaningful revenue growth that it will not get from the Broadcom, Qualcomm, NXP combination. It is obvious though that the size of the new company would be problematic for Intel though.

 

Business Complexity

This analysis shows the size of each main product/market combinations for each of the 4 players in 2017. Intel’s business complexity would increase significantly – not something they are good at.

 

 

 

 

 

 

Did Trump just kill Micron Technology?

More to follow.