Intel Stock Plunges Amid Deal Skepticism

Key Highlights:

* Intel (INTC) shares plummeted 6% on Wednesday, reversing recent gains.
* Analysts question potential deals with TSMC (TSM) and Broadcom (AVGO).
* Intel's foundry model has faced challenges, making it an acquisition target.
* Experts believe a breakup of Intel's core business may not be viable.

INTC's Steep Decline

On Wednesday, Intel's stock experienced a sharp 6.10% decline, closing at $25.72. This reversal follows a significant upswing that had witnessed the company's largest five-day gain in its history as a publicly traded entity.

Deal Rumors and Skepticism

The decline was attributed to skepticism expressed by analysts regarding recent reports of potential deals with TSMC and Broadcom. The Wall Street Journal reported that TSMC may consider acquiring Intel's semiconductor factories, while Broadcom is reportedly considering a bid for Intel's product business.

TSMC-Intel Deal Concerns

Citi analyst Christopher Danely highlighted the distinct manufacturing processes used by Intel and TSMC. He expressed doubts that TSMC would benefit from controlling Intel's manufacturing facilities. Additionally, Danely noted the potential regulatory hurdles from domestic and international authorities that a TSMC-Intel deal may face.

Broadcom's Potential Bid

Danely also analyzed the possibility of Broadcom acquiring Intel's product business. He emphasized the need for Broadcom to acquire the company in its entirety for a successful acquisition. However, he suggested that Broadcom could consider buying the product business and divesting Intel's merchant foundry.

Intel's Resistance to Deals

Industry experts believe Intel is unlikely to be receptive to such deals. Analysts cite Intel's confidence in its manufacturing process, which aims to rival TSMC's by 2025. They also question the strategic rationale for TSMC to enter into a joint venture with Intel, as it could potentially benefit its competitor.