Bernstein ‘somewhat skeptical’ on rumors Intel will add AMD as a foundry customer

Investing.com -- Speculation that Intel could add Advanced Micro Devices as a foundry customer was met with doubt by Bernstein, which described the reports as premature.

Semafor reported that Intel was in “early talks” with AMD, but Bernstein highlighted the lack of detail, noting it was “unclear how much of [AMD’s] manufacturing would shift to Intel if the two companies reach a deal, or whether it would come with a direct investment.” 

Bernstein said the report was the latest in a string of speculative headlines around Intel.

“The ‘save Intel’ news has flowed quick and easy over the last several weeks, starting with the government’s acquisition of a sizeable stake in return for providing the company’s previously-promised $8.9B in CHIPS act money, Softbank’s $2B investment, a new NVIDIA partnership involving both a product arrangement as well as $5B equity stake, and more recently talk of the company approaching both Apple as well as TSMC (though the latter dismissed such talk over the weekend),” wrote the firm.

Bernstein added: “Frankly, we wouldn’t be surprised to hear more of these (especially of the speculative nature).”

On the Intel-AMD rumor, the analysts wrote: “We remain somewhat skeptical... hopes for a foundry deal (from anyone) seem very premature to us though, and not just because Intel and AMD remain locked in a competitive product battle that the latter is clearly winning at the moment.” 

They noted Intel has yet to deliver its 18A process internally, with the external 18AP version “still quite some time away” and 14A “years longer than that.”

While not ruling out limited collaboration in packaging or lagging-edge products, Bernstein said a leading-edge deal was “probably not in the cards at this point.”

Bernstein continues to rate both Intel and AMD Market Perform, adding: “We suspect more volatility remains in store for the shares; we remain on the sideline.”