NEW YORK (TheStreet) -- It's not hard to see that M&A has become the new growth strategy in the semiconductor industry -- it's eat or be eaten. And with their survival hanging in the balance, there's no in-between. So it's a bit surprising that chip giant Qualcomm (QCOM) has been nothing more than an observer amid all of the wheeling and dealing. However, I don't expect it to stay silent for long.
With Intel's (INTC) $16.7 billion acquisition of Altera (ALTR) now official after weeks of rumors, the fun continues. That bid follows Avago Technologies' (AVGO) $37 billion deal for Broadcom (BRCM) last week, a move that will make them the third-largest U.S. semiconductor maker company (by revenue). Avago's move likely accelerated the talks between Intel and Altera.
The terms Intel and Altera finally agreed on were the same Altera had reportedly rejected previously. Intel didn't budge and Altera, which has struggled with revenue -- missing analysts' average sales targets twice in the last three quarters -- needed the deal.
All of this this brings us to Qualcomm, which remains the second-largest U.S. chipmaker (behind Intel), but is also in desperate need of a shot in the arm. Like Intel/Altera and Avago/Broadcom, Qualcomm could benefit from expanding its product portfolio and diversifying its wireless businesses, which earlier this year lost chip placement in Samsung's (SSNLF) new Galaxy phones.