Intel's Stock Plunges 6% Amid Deal Skepticism

Intel Corporation (INTC) shares experienced a sharp decline of 6.10% on Wednesday, marking an end to a significant upward trend that saw the stock achieve its highest five-day gain in its public trading history.

TSMC and Broadcom Deal Rumors Fuel Uncertainty

Analysts expressed skepticism over recent reports suggesting potential deals with Taiwan Semiconductor Manufacturing Company, Limited (TSM) and Broadcom Inc. (AVGO). The reports had indicated that TSMC was exploring the acquisition of Intel's semiconductor factories, while Broadcom was considering a bid for Intel's product business.

Concerns Over TSMC-Intel Manufacturing Compatibility

Citi analyst Christopher Danely highlighted the incompatible manufacturing processes used by TSMC and Intel. Danely argued that TSMC acquiring Intel's manufacturing facilities would not be advantageous, as Intel's chips are specifically designed for its own processes.

Regulatory Scrutiny and National Interest

A potential TSMC-Intel deal could also face regulatory challenges from both domestic and international authorities. Global antitrust concerns and the Trump administration's reluctance to allow foreign entities to acquire iconic American companies could hinder progress.

Intel's Struggles and Acquisition Rumors

Intel has historically manufactured its own semiconductors, but recently opened up its manufacturing business to external customers. However, the foundry has failed to attract external customers, and Intel's product business has lost market share to competitors. These challenges have fueled speculation that Intel could become an acquisition target.

Broadcom's Potential Acquisition Strategy

Danely believes that Broadcom would need to acquire Intel in its entirety for a successful acquisition. However, Intel is unlikely to be receptive to such deals, as it remains confident in its manufacturing process and the trajectory of its product business.

Analysts Skeptical of Joint Venture or Intel Breakup

Analysts dismissed the possibility of a TSMC-Intel joint venture, questioning why TSMC would support its competitor. They also cast doubt on the advantages of breaking up Intel's core business, suggesting that it would be counterproductive from a competitive standpoint.