Intel’s stock has experienced its best week in 25 years, surged 23.6% (and nearly 32% at peak) due to rumors of a potential partnership with rival Taiwan Semiconductor Manufacturing Co. (TSMC). Ta. This dramatic rise, the biggest since January 2000, reflects investors’ optimism about a shift after a period of low performance.
The catalyst for this surge is speculation, at the request of the Donald Trump administration, that TSMC may be planning to gain control of Intel’s factory. Although the companies declined to comment, the report promoted existing speculation, including an analysis from Robert W. Baird & Company that the US government could promote cooperation. Baird’s analysis suggests that TSMC can send engineers to Intel’s fabs to improve manufacturing processes, leading to a joint venture funded by the US Chips Act.
Why and how TSMC Partnerships are “good news” for Intel
TSMC is the largest provider of outsourcing chip production, serving companies such as Apple, Nvidia and Advanced Micro Devices (AMD). The advances in manufacturing, which surpassed Intel, have allowed customers to earn market share profits from American companies.
Daniel Newman of Futurum Group added to Bloomberg that he considers the potential partnership “very bullish” but remains unconfirmed. He said Intel’s low stock valuation and investors are betting on catalysts such as partnerships and new leadership to bring the company back, and that TSMC’s report suggested it was that catalyst.
Intel is struggling, especially in the fast-growing AI chip market, lagging behind Nvidia. Its ambitious turnaround strategy led by former CEO Pat Gelsinger shows limited progress. Gelsinger’s departure, combined with reporting potential acquisitions (including chilled interest from Qualcomm) and reporting disappointing revenue forecasts, created an air of uncertainty.
Despite the optimism surrounding TSMC rumors, analysts like City’s Christopher Dennery remain skeptical, according to a Bloomberg report. But Intel is because the Trump administration focuses on domestic chip manufacturing. With the US prioritizing AI hardware production, Intel could become a key player as the only major US AI chip manufacturer. Gabelli Funds’ Hendi Susanto is said to have highlighted this possibility, but warns that Intel’s challenges are not over and quick fixes are unlikely. He emphasized that Intel’s recovery is a multi-year project.
