Investors Want Qualcomm to Make a Big Acquisition by Aaron Pressman @FortuneMagazine May 25, 2016, 12:38 PM EDT E-mail Tweet Facebook Linkedin Share icons Qualcomm CEO Steven Mollenkopf was in Boston this week to speak with investors at J.P. Morgan’s annual tech conference. On stage with J.P. Morgan jpm analyst Rod Hall on Tuesday, Mollenkopf faced a packed room of hedge fund managers, mutual fund analysts, and others all eager to hear if the company could continue to get back on track amid slowing smartphone sales. While some surely wanted to hear about Qualcomm’s latest dealings with Chinese regulators or get a read on the health of the phone market, Hall knew what was on most people’s minds. “So let’s get on the main question that I get all the time, and I think a lot of people here in the room probably have, and that is regarding M&A around the chip business,” Hall said. Noting most investors want to see Qualcomm do a major acquisition, Hall asked, “Do you somehow fundamentally disagree with investors’ opinion here, and if so, why?” Get Data Sheet, Fortune’s technology newsletter. Mollenkopf ticked off a few of the small deals that Qualcomm qcom has done, including last year’s $2.4 billion purchase of U.K. chip company CSR, explaining that each brought either new technology or a new sales channel. Then things got a bit mushy. “As we see opportunities to do that we will go ahead and do that,” the CEO summed up. “We certainly think that we have the opportunity. And I wouldn’t read too much into anything other than that we feel like we’re getting the core business in a strong position. We kind of feel a little bit more on the front of our feet in terms of where we’re positioned there. We see a good strategic funnel to grow.” The question comes amidst an massive wave of consolidation that has hit the semiconductor industry. The slowing of easy technological advances has put a premium on companies with large-scale operations to keep chip costs low, driving companies to bulk up through M&A. Last year saw NXP Semiconductors nxpi buy Freescale for $12 billion, Avago Technologies avgo grab Broadcom for $37 billion, and Intel’s intc $17 billion purchase of Altera. But Mollenkopf stayed largely on the sidelines. Analyst Rod Hall took the answer at Tuesday’s session as an affirmative, writing later that “the key takeaway for us is that the company sounded open to doing large acquisitions.” But the possible target and timing of a big deal “remains unclear,” he added. Qualcomm certainly has the means to pull off a big deal with $30 billion of cash on its balance sheet and modest levels of debt. Frequently mentioned targets include programmable chip maker Xilinx, which has a stock market value of under $12 billion, and NXP Semiconductors, which with a market value of over $30 billion, supplies Apple among others with power management along with wireless and sensor chips. To see how Qualcomm chips could make cities smarter, watch: Shares of Xilinx xlnx jumped as much as 7% on Tuesday afternoon, a few hours after Mollenkopf spoke, amid rumors of a possible takeover. NXP shares were 3% higher on day when semiconductor stocks performed well overall. A Xilinx deal could make sense to bolster Qualcomm’s push into data centers, according to Patrick Moorhead, president of Moor Insights & Strategy. Those kinds of customers want chips that can be reprogrammed on the fly, known as field-programmable gate array, or FPGA, circuits. “This could make a lot of sense as I believe it could help the company in the datacenter but even automotive, where car companies are looking very closely at FPGAs for self-driving functions,” Moorhead says. Other analysts prefer the bigger NXP option. Timothy Arcuri, an a analyst at Cowen & Co., argued in a report on Tuesday that NXP would be the better fit with its focus on devices and cars while bolstering Qualcomm’s push into the “Internet of things.” Now it’s just up to Mollenkopf to clarify.