Intel Stock Plummets 6% Amid Skepticism Over Potential Deals
Intel's (INTC) stock experienced a significant decline of 6% on Wednesday, marking the end of a remarkable rally that saw shares reach their highest five-day gain in the company's public history.
Analyst Concerns Fuel Sell-Off
Analysts have expressed skepticism over recent reports suggesting potential deals between Intel, TSMC (TSM), and Broadcom (AVGO) that could potentially break up the US chipmaker.
TSMC and Intel Deal Questioned
Citi analyst Christopher Danely highlighted the different manufacturing processes used by TSMC and Intel. He argues that it would not be feasible for TSMC to acquire Intel's manufacturing facilities due to the significant differences in their production methods.
TSMC-Intel Joint Venture Scrutiny
A potential joint venture between TSMC and Intel could face significant regulatory hurdles both domestically and internationally. Antitrust concerns and heightened geopolitical tensions could delay or even prevent such a transaction.
Market Share Loss and Acquisitions
Intel has been facing challenges in its product business, losing market share to competitors. This has made the company an attractive acquisition target in recent months.
Broadcom Bid Speculation
Danely suggests that Broadcom would need to acquire all of Intel, not just its product business, to achieve success. He believes that breaking up Intel's core business would not be beneficial.
Intel's Resistance
Intel is unlikely to support a deal that would result in the breakup of the company. Intel insists that its manufacturing process will be competitive with TSMC's by the end of 2025.
Analysts Skeptical of TSMC Joint Venture
Analysts question the rationale for TSMC to enter into a joint venture with Intel, as it could benefit a direct competitor.