A buyout will also face tough antitrust scrutiny globally as it would unite two crucial chip firms in the sector's biggest-ever deal, creating a behemoth with a strong share of the smartphone, personal computer and server markets.

Shares of Intel rose 3% before the bell on Monday, after media reports late on Friday about Qualcomm's early-stage approach for the struggling chipmaker. Qualcomm's shares were lower.

"The rumoured deal between Qualcomm and Intel is intriguing on many levels and, from a pure product perspective, makes a certain degree of sense as they have a number of complementary product lines," said TECHnalysis Research founder Bob O'Donnell.

"The reality of it actually occurring, however, is very low. Plus, it is unlikely Qualcomm would want all of Intel, and trying to break apart the product business from the foundry business right now would just not be possible," he said.

--Reuters--