Intel Stock Surges Amid AI Manufacturing Push
Boosted by Vice President JD Vance's bullish remarks on domestic chip production, Intel stock (INTC) surged nearly 3% in pre-market trading on Wednesday, extending gains from the previous day.
"To protect America's competitive edge, the Trump administration will prioritize building the most advanced AI systems using domestically designed and manufactured chips," Vance stated at the AI Summit in Paris.
Intel shares jumped 6% following Vance's comments, highlighting the company's significant role in US AI chip production, despite ongoing internal challenges. Intel remains the only large-scale American foundry for cutting-edge computer chips, producing both for itself and other companies.
While most advanced AI chips are currently manufactured in Taiwan by TSMC, Intel outsources production of its most sophisticated chips to its rival. Economic incentives from the US CHIPS Act have encouraged Samsung and TSMC to expand operations in the US, but the majority of their manufacturing remains overseas.
Vance's assertion that the US will "ensure" AI systems use American-made chips raises questions, as Trump has criticized the CHIPS Act and suggested tariffs on chip imports.
Despite Intel's recent gains, the company faces challenges in advanced manufacturing and has lost significant market share to TSMC. According to current employees, Intel's latest AI chip manufacturing process faces "numerous issues."
Additionally, Intel's commitment to its foundry business has been questioned after the departure of its CEO and the announcement that its AI chief has joined Nokia.
Despite a two-day stock rally, Intel's market cap remains significantly lower than Big Tech firms, and its stock is down over 50% year-over-year. The company's quarterly revenue decline persisted in January.
Despite partnerships with Amazon's AWS and Microsoft, Intel's nascent foundry business continues to weigh down its overall financial performance.