Intel’s stock experienced a boost on Wednesday following reports of discussions involving Taiwan Semiconductor and several other chipmakers, such as Nvidia and AMD, about potentially taking over Intel’s chip manufacturing segment. According to information obtained by Reuters, this consortium, which also includes Broadcom, could assume control of Intel’s foundry operations, responsible for producing chips for Intel and other companies. In 2024, Intel faced a significant net loss of $18.8 billion, with its foundry division accounting for an operating income loss of $11.6 billion over the year.
Following the news, Intel’s shares saw a rise of roughly 3% in the afternoon trading session, although a broader perspective reveals a 54% decrease in its stock price over the past year.
Amidst concerns that Nvidia’s AI trade momentum might be waning due to potential tariffs and export restrictions, the company’s stock has dipped 14% this year. Nevertheless, it’s worth noting that Nvidia’s stock has gained 24% over the past year. Meanwhile, shares in TSMC, Broadcom, and Nvidia rose following the consortium news. Intel, however, has not commented on the report.
Furthermore, the Trump administration has been actively seeking to secure Intel’s chip-manufacturing capabilities within the US. Despite Intel being the largest chip producer domestically, only 12% of the world’s chips are manufactured in the United States, a stark decrease from 37% in 1990.
This decline became particularly evident during the COVID-19 pandemic when chip shortages affected various industries, from consumer electronics to the automotive sector. Concerns have also been raised about geopolitical risks, including the threat of China invading Taiwan or natural disasters impacting chip supply chains to the US, potentially hurting large parts of the economy.
The Trump administration had previously proposed that TSMC acquire parts of Intel’s business to stabilize it over the long haul. Former CEO Pat Gelsinger aimed to bolster Intel’s foundry operations as a competitor to TSMC’s well-established semiconductor manufacturing.
However, progress has been slow, and Gelsinger was replaced by Co-CEOs David Zinsner and Michelle Johnston Holthaus last year. Until a new permanent CEO is appointed, they will continue to lead the company. Both Intel and TSMC have benefitted from financial support through the CHIPS Act to develop new production facilities in the US. In March, TSMC announced an impressive $100 billion investment in new Arizona plants, adding to the $65 billion it had previously pledged for the area.
