NEW YORK (TheStreet) -- Chipmaker Qualcomm (QCOM - Get Report) is at an important crossroads. Along with other technology behemoths, its trying to stay ahead of the competition and remain relevant in a quickly changing landscape.

Recently there have been some key mergers in the semiconductor industry. PC-centric chipmaker Intel (INTC - Get Report) bid to acquire Altera (ALTR - Get Report) in a $16.7 billion deal. Avago Technologies (AVGO - Get Report) has proposed a $37 billion takeover of Broadcom (BRCM).

Companies are flush with cash and in need of technology, cost-cutting synergies and scale in order to remain competitive. As a result, more consolidation and merger and acquisition activity appear to be looming.

Many have speculated that Qualcomm, the largest mobile chipmaker and second-largest U.S. chipmaker overall behind Intel, may also get on the acquisition train in order to supplement the slowing growth of its core smartphone chip business. One option discussed is merging with another leading wafer manufacturer or buying a company on the communications infrastructure side.

In the chip business these days the mantra is, "eat or be eaten." Earlier this year, Qualcomm was dealt a huge blow when Samsung (SSNLF) chose not to use its chips in the new Galaxy smartphones, a loss it attributed to timing issues. And Qualcomm's LTE China business, which was touted as the company's source of future growth, has been disappointing and accompanied by legal and regulatory setbacks.

Activist hedge fund Jana Partners owns almost $2 billion of Qualcomm stock. It suggests that Qualcomm could create shareholder value by separating its chip business from its patent-licensing business and buying back more shares. Qualcomm derives 70% of its revenues from chipset sales, with about two-thirds of the firm's earnings coming from licensing.

But Qualcomm management is not on board with splitting the company into two parts, arguing there are "significant synergies" between the two. The company is also not embracing Jana Partner's recommendations to cut research and development spending.

In part as a response to this activist pressure, Qualcomm announced a plan in March to buy back $15 billion worth of stock. But in light of the recent takeover activity in the industry, it might also make sense for Qualcomm to acquire another chipmaker.

One such rumored target is Skyworks Solutions (SWKS), which makes high-performance analog chipsets for the smart devices connecting the "Internet of Everything." Like Avago, Skyworks is a key supplier to Apple (AAPL) with chips in Apple's new iPhones and iPads. An acquisition of a company such as Skyworks could help Qualcomm boost its presence in the increasingly important Apple supply chain.

There has been speculation that Qualcomm could buy an ARM-based server chipmaker such as Advanced Micro Devices (AMD) to boost its presence in the server/enterprise market. Samsung also has been a rumored suitor of AMD.

There's a host of other fabless players that might also be acquisition targets or potential acquirers: Xilinx (XLNX), Nvidia (NVDA), Marvell (MRVL) and Cavium (CAVM).

Pacific Crest's Brad Erickson suggests that Qualcomm may bid for a company such as Ambarella (AMBA), which supplies chips to GoPro (GPRO). Ambarella just reported a blowout quarter on strong sales for its low-power video processing chip.

Qualcomm stock is down about 6% year to date and more than 13% over the last year given the company's slowing growth prospects in the mobile chip segment.

Given all the cash on its balance sheet, Qualcomm may certainly have something up its sleeve besides share buybacks and dividends.

Last month, Qualcomm sold $10 billion worth of debt to fund aggressive share buybacks, but the company may have earmarked some of the proceeds for strategic acquisitions. 

Qualcomm needs to do something to maintain its superiority or risk being gobbled up. The company has a new CEO, Steve Mollenkopf, who took over from Paul Jacobs, the son of the company's co-founder Irwin Jacobs. It was Mollenkopft who was behind Qualcomm's largest acquisition to date, the $3.1 billion purchase of chipmaker Atheros in 2011, so he is not averse to making deals.

Last October, Qualcomm made a small acquisition, of U.K. company Cambridge Silicon Radio, a chip and software solutions provider. The goal was accelerating Qualcomm's presence in the Internet of things, a term used to describe every-day devices that are connected to networks. Qualcomm outbid Micron Technology (MU), paying a 56% premium for the company.

With competition heating up from Intel in the datacenter chip market and now from the Avago-Broadcom combination in mobile, Qualcomm is going to have to take action sooner rather than later to remain on top.

Rather than merging with an equal or being gobbled up and losing its autonomy, it seems likely that Qualcomm will try to maintain its superiority with some kind of acquisition.

Qualcomm is also working to regain some of Samsung's high-end smartphone business. That could take some of the pressure off as well given growth expectations for the handset business over the next few years.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.