Intel (INTC) stock jumped as much as 5% premarket Tuesday following a report that its rivals Broadcom (AVGO) and TSMC (TSM) are exploring potential deals with the chipmaker that would split it into two.
The Wall Street Journal reported late Saturday that Broadcom (AVGO) is considering making a bid for Intel’s product business, which designs semiconductors for computers and servers. The Journal, which cited people familiar with the matter, said that TSMC has looked at controlling some or all of Intel’s factories, potentially as part of an investor consortium. The companies have not submitted deals to Intel, and the talks are preliminary and informal, The Journal wrote.
Broadcom shares traded flattish Monday, while US-listed TSMC shares were up slightly less than 1%.
Intel stock has been on a tear over the past week. The stock notched its biggest weekly gain since 2000 last Friday as the US signaled support for domestic chipmaking and reports surfaced that the US government was working with TSMC to support Intel’s turnaround efforts.
Intel’s manufacturing business primarily makes chips for itself (Intel’s product business) but opened up a foundry — in other words, taking on external customers — in 2022 under the leadership of then-CEO Pat Gelsinger. Gelsinger had pushed to launch a foundry business competitive with Taiwan’s TSMC in an attempt to right Intel’s struggling manufacturing division, which had suffered from setbacks since the mid-2010s.
The turnaround effort has not been successful to date, given that Intel’s manufacturing business has struggled to take on outside customers and continues to bleed cash. Intel’s earnings disappointed investors throughout 2024, and the stock fell around 60% last year. Gelsinger was ousted by Intel’s board in December. The company has become an acquisition target, and the interest from Broadcom and TSMC follows reports of potential takeovers by Qualcomm (QCOM), Arm (ARM), and Apollo last year.
The symbol for Intel appears on a screen at the Nasdaq MarketSite, in New York, Tuesday Oct. 1, 2019……
