RBC Capital Markets analyst Doug Freedman believes Intel could acquire Taiwanese chip developer MediaTek to grow its wireless business. Freedman estimates such a deal may materialise over the next two to three years and claims MediaTek may be worth $27 billion, a premium of 30 percent to the company's current value.
MediaTek is world's second-largest ARM processor supplier.
Intel is currently spending upwards of $1 billion a quarter on its ambitious mobile expansion plans and so far it does not have much to show for it.
MediaTek on the other hand is doing quite well and it has cemented its position as the world’s leading provider of value SoC designs. Freedman says buying MediaTek could be a “less expensive way” to increase market share and it would entail less risk.
"Instead of Intel continuing to spend $4-$6 billion a year to enter the market (higher end of spending range as it achieves success), hypothetically, an acquisition of MediaTek may reallocate Intel's best-in-class under-utilized fabs and financial resources to a rising star in the system-on-chip world, solidifying MediaTek's market position," the analyst wrote in a note.