Intel Stock Rises on Reports of Foundry Sale Talks

Intel (INTC) shares climbed 3% on Wednesday following reports that Taiwan Semiconductor (TSMC) and a group of chipmakers, including Nvidia (NVDA) and AMD (AMD), are in discussions to take over Intel’s struggling foundry business. The consortium also reportedly includes Broadcom (AVGO).

Intel’s Financial Struggles

The news comes as Intel grapples with major financial losses, reporting a net loss of $18.8 billion in 2024. Its foundry segment alone saw an operating income loss of $11.6 billion. While Intel has not commented on the report, investors reacted positively to the possibility of a deal.

Stock Market Reaction

Shares of Intel rose 3% in afternoon trading, while Nvidia, TSMC, and Broadcom also saw gains. However, Intel’s stock remains down 54% over the past 12 months, despite a modest 1.6% gain year to date. Nvidia’s stock, meanwhile, has dropped 14% this year amid concerns over AI market saturation and export restrictions.

Geopolitical Concerns and U.S. Semiconductor Strategy

The Trump administration has been actively working to secure Intel’s future in the U.S. semiconductor industry. With the country’s share of global chip production shrinking from 37% in 1990 to just 12% today, officials are wary of supply chain vulnerabilities. The COVID-19 pandemic and geopolitical tensions, including concerns over China’s potential actions against Taiwan, have heightened fears of semiconductor shortages.

CHIPS Act and Industry Investments

Both Intel and TSMC have received billions of dollars from the CHIPS Act to build new manufacturing plants in the U.S. TSMC recently committed $100 billion to its Arizona facilities, in addition to the $65 billion previously allocated. Intel is also investing in new U.S. plants, including a large-scale facility in Ohio, though the project has been delayed to 2030 from its initial 2025 completion target.

Leadership Challenges at Intel

Intel’s former CEO Pat Gelsinger attempted to transform the company’s foundry business into a viable competitor to TSMC, but progress has been slow. Following Gelsinger’s departure, co-CEOs David Zinsner and Michelle Johnston Holthaus are leading the company while the board searches for a permanent replacement.

Looking Ahead

As talks between TSMC and Intel progress, the semiconductor industry remains at a crossroads, balancing market pressures, geopolitical risks, and evolving trade policies. The outcome of these negotiations could reshape the competitive landscape of global chip manufacturing.