Qualcomm enters agreement to buy UK chip firm Alphawave for $2.4 billion

US tech giant Qualcomm has acquired Alphawave – one of Britain’s handful of homegrown chip designers in a deal worth $2.4 billion (approximately £1.8 billion).

Under the terms, Qualcomm will pay 183 pence for each Alphawave share, a significant premium over recent trading levels, and the transaction is slated to complete in the first quarter of 2026, subject to both shareholder and regulatory approvals.

London’s tech sector is slowly ceding ground to the US

Founded with a focus on high-speed connectivity technology for data centers and AI applications, Alphawave first hit the London market in 2021 at an initial price of 410 pence per share.

Since its debut, however, its share price has struggled to reach that level again, held back by a relatively concentrated customer base and the broader uncertainties affecting semiconductor firms operating between the US and China.

Qualcomm first revealed its interest in April, and after months of careful negotiation, Alphawave’s board has now given the deal its full backing.

Shareholders face a choice; they can accept the cash offer of 183 pence per share or swap each Alphawave share for 0.01662 newly issued Qualcomm shares.

Qualcomm has also floated an alternative package involving two types of exchangeable securities, 0.00964 units of “Series A” and 0.00698 of “Series B” per Alphawave share, but Alphawave’s directors have declined to recommend these hybrid instruments, noting that their value could prove hard to pin down.

For the takeover to go through, at least 75% of Alphawave’s shares must vote in favor; roughly half of the register, including board members, has already pledged support.

According to The Guardian, this deal underlines an ongoing trend in which London’s tech sector is increasingly losing its crown jewels to US markets. In recent years, high-profile listings such as Wise have signaled plans to move their main share registration to New York, while Deliveroo agreed earlier this year to a £2.9 billion takeover by DoorDash.

Darktrace, the Cambridge-based cybersecurity specialist, was snapped up by private equity firm Thoma Bravo for $5.3 billion last year. Outside of pure tech, companies like Ashtead, Flutter Entertainment and CRH have all opted to shift their primary listings across the Atlantic, lured by deeper pools of capital and higher valuations.

Transaction strategic for Qualcomm to power its AI-related business

From Qualcomm’s perspective, snapping up Alphawave makes strategic sense. Qualcomm’s core business, power-efficient processors for smartphones, has encountered slower growth, and the company is eager to diversify into data-center infrastructure and AI-related markets.

Alphawave brings to the table advanced wired connectivity and interconnect technologies that dovetail neatly with Qualcomm’s existing portfolio of central and neural processing units.

Cristiano Amon, Qualcomm’s CEO, praised Alphawave’s “leading high-speed wired connectivity and compute technologies” and expressed confidence about the combined teams.

“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 datacentre infrastructure.” Amon.

Alphawave’s leadership is equally upbeat. CEO Tony Pialis described the acquisition as a chance to accelerate the company’s roadmap, broaden its customer reach and deepen its product suite.

In recent quarters, Alphawave reported a marked uptick in orders from North American AI firms, an encouraging sign that its chips are gaining traction where processing speed and bandwidth are most in demand.

For those Alphawave investors who opt for cash, the deal offers an immediate exit at a hefty premium over the market price. But for shareholders who choose Qualcomm equity, it provides a stake in a global semiconductor heavyweight well-positioned to ride the wave of AI, 5G and data center expansion.

Either way, this transaction leaves a narrower field of UK-listed chip designers and raises fresh questions about London’s ability to retain cutting-edge technology ventures. As the semiconductor landscape becomes ever more competitive and capital-hungry, London’s government and financial community may need to rethink how they support fast-growing tech firms.

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