Intel (INTC) stock soared 16% on Tuesday following reports that Broadcom (AVGO) and Taiwan Semiconductor Manufacturing Company (TSMC) are exploring potential deals that could split the chipmaker into two.
Broadcom and TSMC Eye Intel’s Business Units
The Wall Street Journal reported that Broadcom is considering a bid for Intel’s product business, which designs semiconductors for computers and servers. Meanwhile, TSMC has reportedly examined acquiring a stake in Intel’s manufacturing arm, possibly as part of an investor consortium. However, no formal proposals have been submitted, and discussions remain in preliminary stages.
Following the report, Broadcom shares fell nearly 2%, while US-listed TSMC shares declined less than 1%.
Intel’s 16% surge marked its largest single-day gain since March 2020, pushing its five-day rally to 38.5%—the biggest in company history.
Intel’s Struggles and the Case for a Split
Intel has been under pressure as its foundry business, launched in 2022 under then-CEO Pat Gelsinger, struggled to attract external customers. Despite US government support for domestic chipmaking, the company’s turnaround efforts faltered, leading to disappointing earnings and a 60% stock decline in 2024. Gelsinger was ousted in December, leaving Intel as a potential acquisition target. Reports last year suggested interest from Qualcomm (QCOM), Arm (ARM), and Apollo.
Wall Street analysts have long favored splitting Intel’s product and foundry divisions to unlock value. Raymond James analyst Srini Pajjuri reiterated this view, stating that a separation is “key to unlocking value.” Intel had already announced plans to establish an independent subsidiary for its foundry business, which analysts saw as a step toward an eventual split.
Challenges to a Potential Breakup
Not all analysts are convinced that an Intel breakup is feasible. Bank of America’s Vivek Arya cautioned that splitting Intel could be “time-consuming and complicated,” citing restrictions under the US CHIPS Act that limit the company’s ability to fully sell off its manufacturing division.
A potential deal with TSMC could also face regulatory scrutiny and antitrust concerns, particularly from China.
As speculation swirls, Intel’s stock remains highly volatile, with investors closely watching for any formal takeover bids or strategic moves.
