The Wall Street Journal has reported that Qualcomm (QCOM) has approached Intel (INTC) about a potential takeover. Bob O'Donnell, TECHnalysis Research president and chief analyst, joins Market Domination to break down the news and what it could mean for the struggling chip designer.

"It would be an enormous change. I do think in the current regulatory environment, it's going to be very difficult for Qualcomm to pull it off. I mean, there is a certain logic to it... Obviously, Qualcomm is this very successful US-based chip designer. Intel's got their own business. They have had a lot of challenges..." O'Donnell tells Yahoo Finance. "It's not surprising to me that we've seen some people, potential suitors, come out and say, 'Hey, this looks like a great opportunity because I still believe in the long run, Intel has got a lot of opportunity.'"

He explains that the move makes "a lot of sense" since Intel and Qualcomm's products do not have significant overlap. "They have complementary types of products. Some of their products compete, for example, in PCs, but they could be seen as complementary offerings," he says. Overall, he sees regulatory issues becoming more of a concern than product offerings.

If Qualcomm were to buy a portion of Intel's business, O'Donnell believes it would likely have its eye on the existing chip business, since it does not have much experience in the foundry. He adds, "My initial thought is they're going to go for the products. But you know, part of the challenge that Intel is facing is that that foundry business has to stay alive. It's too important to fail from a US manufacturing and tech competitiveness perspective. And it's not clear that right now it's got enough on its own."

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This post was written by Melanie Riehl