Alphawave Semi swallowed in Qualcomm's $2.4B connectivity conquest

Qualcomm has bid $2.4 billion to buy connectivity specialist Alphawave Semi. If approved it will see yet another London Stock Exchange-listed tech biz put under the control of an overseas owner.

Alphawave, whose IP is incorporated into some cutting-edge silicon photonic interconnects, said it has agreed the terms and conditions of a takeover by California-based Qualcomm, which makes smartphone and wireless chips.

Interest in the purchase was first signaled by Qualcomm at the start of April, and the deadline for a final decision has subsequently been extended multiple times, most recently on June 5.

Qualcomm said the acquisition will provide key assets for its expansion into datacenters. The company recently confirmed it is getting back into the datacenter silicon game after pulling out in 2018 following a failed effort to deliver Arm-based server products.

This time around, the US chipmaker believes its Oryon CPU and Hexagon NPU cores are poised to tap into growing demand for high-performance, low-power compute. This is fueled by AI inferencing and the transition to custom CPUs powering servers by the hyperscale operators, such as AWS with its Graviton processors and Microsoft's Cobalt 100 chips.

Alphawave's nous in high-speed connectivity made it a target for tech firms needing higher performance and lower power links inside datacenters. Earlier reports suggested that chip designer Arm was also seeking to buy Alphawave to expand its own portfolio, but decided not to pursue the matter following preliminary discussions.

Instead, Alphawave's products and technology are set to form a part of Qualcomm's infrastructure platforms to power services in a wide array of applications, including datacenters, AI, data networking, and data storage.

"Alphawave Semi has developed leading high-speed wired connectivity and compute technologies that are complementary to our power-efficient CPU and NPU cores," Qualcomm chief Cristiano Amon said in a statement. "The combined teams share the goal of building advanced technology solutions and enabling next-level connected computing performance across a wide array of high growth areas, including datacenter infrastructure."

• Qualcomm confirms it's dipping into datacenter world again, probably for AI
• Qualcomm says license fight was because Arm wants to make its own server chips
• Qualcomm set to move in on UK chip IP biz Alphawave
• Arm gives up on killing off Qualcomm's vital chip license

Alphawave president and CEO Tony Pialis claimed the takeover is a "significant milestone."

"By combining our resources and expertise, we will be well-positioned to expand our product offerings, reach a broader customer base, and enhance our technological capabilities. Together, we will unlock new opportunities for growth, drive innovation, and create a leading player in AI compute and connectivity solutions," Pialis said.

The transaction, expected to complete during the first calendar quarter of 2026, is conditional on the approval of Alphawave shareholders and the deal being given the nod by the relevant regulatory authorities in the US, Germany, South Korea, and Canada, as well as foreign direct investment approval from the UK government.

It is unlikely the latter will prove to be a problem, despite growing concern about London-listed firms being snapped up by foreign entities. A report last year warned of the risks to the UK posed by "significant dependencies" on US suppliers and investors, and of creeping Chinese investment and ownership of British tech startups. Alphawave was founded in Canada and listed in London in May 2021.

Commenting on the news, financial analyst biz Jefferies said it does not expect any regulatory obstacles, as Alphawave has now disposed of its stake in a Chinese joint venture, WiseWave.

"We had upgraded Alphawave to a Buy on April 3, when Qualcomm first confirmed that it is considering making an offer, as we believed that an eventual deal was likely. We expect this deal with Qualcomm to conclude at the bid price, in the timescale specified," Jefferies stated.

Under the terms of the agreement, each Alphawave shareholder will be entitled to receive $2.48 for each share, which the company claims represents a 96 percent premium over the price of 94 pence the shares were valued at prior to any talk of a Qualcomm takeover. ®