Amid reports that Qualcomm (QCOM) approached Intel (INTC) about a possible takeover, Futurum Group chief market strategist Cory Johnson sits down with Josh Lipton and Julie Hyman on Market Domination to take a closer look at what a potential acquisition would mean for the two chip companies.

“This would be the biggest deal in the history of the semiconductor industry, ever,” Johnson says, explaining, “Intel was once the largest semiconductor company in the world. It is no longer… They are still very much wedded to selling chips into PCs because their business is selling chips into the data center has just not worked out. They've missed so many product cycles with Nvidia (NVDA) cleaning their clocks in the data center, and that shows no sign of any immediate change.”

Johnson notes that Intel’s recently announced deal with Amazon Web Services (AMZN) could give some hope that “they're going to be able to get some of their semiconductor manufacturing business into a better place as they build out facilities all around the world, and especially in the US.”

Looking at how a merger would complement Qualcomm’s and Intel’s respective portfolios, Johnson says “Intel [has] things that Qualcomm really doesn't have."

"It's got manufacturing prowess; it's got a place in data centers and in PCs. Qualcomm has some plans around PCs, but Qualcomm is largely a smartphone company. Most of their business is making chips for smartphones…. that is something that Intel's famously missed out on for decades now," he says. If Qualcomm were to take over Intel, it could fundamentally change the company’s business as “historically [Qualcomm] has not made their own chips.”

An acquisition would have to be approved by regulators, but the strategist believes in this instance, national security interests may trump antitrust concerns: “We really need a strong chip industry in this country to fight against the risk of the concentration we have in Taiwan. And something that would help Intel survive and do better, which this merger might be seen as might be welcomed by Washington.”

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This post was written by Naomi Buchanan.