Trump announces trade deal with EU following months of negotiations
Wednesday saw a notable decline in Intel (NASDAQ:INTC) shares, which dropped 6% during early trading hours. The fall came after Paul Liu, head of Taiwan’s National Development Council (NDC) and a board member of Taiwan Semiconductor Manufacturing (NYSE:TSM), refuted recent speculation that TSMC is considering the purchase of Intel’s foundry business. This clarification was reported by DigiTimes.
Liu addressed the concerns of lawmakers by stating that such a topic has never been discussed at the board level, further illustrating the incompatibility of the idea by comparing it to mixing diesel with gasoline.
The past several months have seen various reports suggesting a potential tie-up between TSMC and Intel. Last week, Reuters reported, citing multiple sources, that TSMC had approached U.S. chip designers Nvidia (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO) with the idea of taking stakes in a joint venture to operate Intel’s factories. This venture would manage Intel’s foundry division, responsible for manufacturing chips tailored to customer specifications, with TSMC potentially running the operations without owning more than a 50% stake.
Additionally, Qualcomm (NASDAQ:QCOM) was also reported to have been approached by TSMC regarding this joint venture, with details provided to Reuters by a separate source.
Despite the downturn experienced today, Intel’s stock has seen a 29% increase year-to-date, fueled by speculation about strategic changes within its foundry unit. The shares also experienced a surge following the recent appointment of Lip-Bu Tan as CEO.
In response to the new CEO appointment, Rosenblatt analyst Kevin Cassidy expressed optimism, stating, "we see Lip-Bu Tan as the most qualified person to take on the task of turning Intel around." This endorsement highlights industry confidence in Tan’s ability to lead a successful restructuring of Intel.