Intel’s stock experienced its best week in 25 years, surging as much as 23.6% (and nearly 32% at its peak) due to rumors of a potential partnership with rival Taiwan Semiconductor Manufacturing Co. (TSMC). This dramatic rise, the largest since January 2000, reflects investor optimism for a turnaround after a prolonged period of weak performance.
The catalyst for this surge according to a Bloomberg report are speculations that TSMC may be planning to acquire a controlling stake in Intel’s factories at the request of the Donald Trump administration. While both companies declined to comment, the report fueled existing speculation, including analysis from Robert W. Baird & Co., that the US government could facilitate a collaboration. Baird’s analysis suggested TSMC could send engineers to Intel’s fabs to improve manufacturing processes, potentially leading to a joint venture funded by the US Chips Act.
Why and how TSMC partnership is ‘good news’ for Intel
TSMC is the largest provider of outsourced chip production, serving companies such as Apple, Nvidia and Advanced Micro Devices (AMD). Its advances in manufacturing, which have surpassed Intel, have allowed its customers to take market share gains from the American company.
Daniel Newman of The Futurum Group told Bloomberg that he sees the potential partnership as “very bullish,” but added that it remains unconfirmed. He noted that Intel’s low stock valuation and suggested investors are betting on a catalyst, such as a partnership or new leadership, to revive the company and that the TSMC reports are that catalyst.
Intel has struggled, particularly in the burgeoning AI chip market where it lags behind Nvidia. Its ambitious turnaround strategy, led by former CEO Pat Gelsinger, has shown limited progress. Gelsinger’s departure, combined with reports of potential acquisitions (including a cooled interest from Qualcomm) and disappointing revenue forecasts, have created an air of uncertainty.
Despite the optimism surrounding the TSMC rumors, analysts like Citi’s Christopher Danely remain skeptical, as per the Bloomberg report. However, Intel could benefit from the Trump administration’s focus on domestic chip manufacturing. With the US prioritizing AI hardware production, Intel, as the sole major US AI chip manufacturer, could become a key player. Hendi Susanto of Gabelli Funds is said to have highlighted this potential but cautioned that Intel’s challenges are far from over and a quick fix is unlikely. He emphasized that Intel’s recovery is a multi-year project.