Intel Stock Plunges 6% Amid Breakup Concerns
Intel Corporation (NASDAQ: INTC) shares plummeted 6.10% on Wednesday, reversing a significant upswing that marked the company's largest five-day gain as a publicly traded entity. The decline followed skepticism expressed by analysts regarding potential deals with Taiwan Semiconductor Manufacturing Company (TSM) and Broadcom Inc. (AVGO).
TSMC Deal Uncertainties
Analysts have raised doubts about a potential deal with TSMC, citing differences in manufacturing processes between the two companies. Citi analyst Christopher Danely noted that Intel's chips are specifically designed for its own manufacturing methods, making it impractical for TSMC to take over. Additionally, a TSMC-Intel deal could face regulatory scrutiny from global authorities, including China and the United States.
Broadcom Acquisition Considerations
Reports suggested that Broadcom was considering acquiring Intel's product business, which designs semiconductors for computers and servers. However, Danely believes that Broadcom would need to acquire Intel in its entirety for a successful integration, as there are synergies between the manufacturing and design aspects.
Intel's Resistance and Future Prospects
Intel has consistently maintained that its manufacturing process will become competitive with TSMC's by the end of 2025. Analysts also doubt the rationale for TSMC to engage in a joint venture with Intel, as it would ultimately benefit its competitor.
Intel's recent struggles have made it an acquisition target, but industry experts believe that the company is not likely to entertain such deals due to its belief in its own manufacturing capabilities and financial stability.