Intel Stock Jumps on Deal Speculation with Broadcom, TSMC
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Intel's Rise
Intel (INTC) stock surged 10% on Tuesday after reports emerged that rivals Broadcom (AVGO) and TSMC (TSM) are exploring potential deals involving the chipmaker.
Deal Details
According to The Wall Street Journal, Broadcom is considering acquiring Intel's product business, which designs semiconductors for computers and servers. TSMC, meanwhile, is reportedly considering investing in or acquiring some or all of Intel's factories.
Company Responses
Intel, Broadcom, and TSMC have not yet made formal offers, and the discussions are preliminary. Broadcom shares declined 2.5% on Tuesday, while TSMC's US-listed shares dropped less than 1%.
Intel's Turnaround
Intel has been struggling in recent years, with its manufacturing division facing challenges in servicing external customers. The company's earnings have disappointed investors, leading to a 60% stock decline in 2022 and the ouster of CEO Pat Gelsinger.
Split Speculation
Analysts have suggested that a split of Intel's product and foundry businesses could enhance its value. Raymond James analyst Srini Pajjuri believes that separating the two units is crucial to unlocking shareholder returns.
Independent Foundry
Intel announced plans last year to establish a separate subsidiary for its foundry business. However, the company's funding under the CHIPS Act may restrict its ability to fully dispose of its manufacturing operations.