Qualcomm strengthens AI portfolio with US$2.4 billion Alphawave deal

US chipmaker Qualcomm agreed to acquire Alphawave for about US$2.4 billion on Monday (Jun 9), as part of efforts to strengthen its AI technology, sending shares of the British semiconductor company up by almost a quarter.

Alphawave is the latest British company to be snapped up in a market plagued by low valuations and stunted growth, with US buyers swooping on firms at comparatively low prices and better-performing bourses proving more attractive for share listings.

Alphawave shareholders will receive 183 pence per share – a near 96 per cent premium to the March 31 closing price immediately before Qualcomm disclosed its interest. By 0837 GMT, the stock was up 23.1 per cent, trading just above the offer price.

Jefferies analysts said they do not expect the deal to meet any material regulatory obstacles, after Alphawave exited its Chinese joint venture, WiseWave, on Monday.

Qualcomm also made two alternative all-share offers for Alphawave on Monday after multiple deadline extensions from the UK takeover panel. However, Alphawave plans to unanimously recommend the cash offer to its shareholders, deeming it fair and reasonable.

Separately, US-based quantum computing company IonQ agreed to buy UK tech start-up Oxford Ionics in a US$1.1 billion deal.

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Alphawave, which designs semiconductor tech for data centres, networking, and storage, is a strategic buy for Qualcomm, which announced its return to the data centre CPU market in May.

“Alphawave has developed leading high-speed wired connectivity and compute technologies that are complementary to our power-efficient central processing unit (CPU) and neural processing unit (NPU) cores,” Cristiano Amon, president and CEO of Qualcomm, said.

Alphawave also garnered takeover interest in April from SoftBank-owned Arm for its ‘serdes’ tech, which boosts chip data processing speeds – key for AI development – and underpins Broadcom’s and Marvell Technology’s multibillion-dollar custom chip businesses.

Arm walked away after initial discussions with Alphawave, Reuters exclusively reported in April citing sources. REUTERS