Intel’s share price has rallied more than 16% on the back of speculation that the struggling chipmaker could be broken up in a deal that involves Taiwan Semiconductor Manufacturing Co. and Broadcom.
Intel shares climbed to $27.39 (A$43.15) on Tuesday, its biggest single-day increase since March 2020.
Although the stock is now up 35% since the start of this year, it’s still down nearly 40% over the last 12 months.
At the request of the Trump administration, TSMC is considering taking a controlling stake in Intel’s factories, reported Bloomberg.
Reports have indicated that TSMC’s arrangement with Intel will have major American chip designers take equity stakes, along with support from the US government. The venture wouldn’t therefore solely be owned by a foreign company. TSMC’s clients include Apple and Nvidia, among others.
Broadcom has also had informal talks with its advisers about making a bid for Intel’s chip-design and marketing business, the Wall Street Journal has previously reported.
Broadcom and TSMC aren’t believed to be working together over a possible Intel deal.
Separately, Silver Lake Management is believed to be in advanced stages of negotiations to acquire a majority stake in Altera, Intel’s programmable chip unit.
Although Intel has been struggling over the last few years, it still manufactures the most widely used components in personal computer and server industries.
Pat Gelsinger, Intel’s chief executive officer, abruptly resigned in December with some media reports indicating that board members no longer had confidence in his plans to turnaround the struggling chipmaker.
Intel drastically cut costs last year. It laid off about 15,000 employees, suspended dividend payments for the fourth quarter and cut A$15.46 billion in costs for this year.
Intel was reported to have rejected a takeover offer from Qualcomm. The US government awarded it up to $7.86 billion (A$12.15 billion) in direct funding through the US Chips and Science Act to advance its commercial semiconductor manufacturing and advanced packaging projects in Arizona, New Mexico, Ohio and Oregon.
However, the latest share rally shows that under the new US administration, Intel might be agreeable to a deal that involves its breakup and support from TSMC and Broadcom.
