Intel (INTC) shares fell 6% on Wednesday, ending a massive expansion in which the stock earned five days’ biggest profit in Intel’s history as a stock-traded company. The decline comes when analysts expressed skepticism about potential transactions with TSMC (TSM) and Broadcom (AVGO) and announced they would dissolve the renowned US chipmaker. I did.
As of 3:12:14pm. Market open.
Intel’s stocks had surged 16% over the weekend, following a Wall Street Journal report. Its rival, Taiwanese contracted chip maker TSMC, is considering managing some or all of Intel’s semiconductor factories as part of an investor consortium. The journal, citing people familiar with the discussion, reported that Broadcom (AVGO) is considering bidding on Intel’s product business, which designs computer and server semiconductors.
Previous week’s news report showed that the US is a proposal floating on TSMC to support Intel’s turnaround. One of the proposals is reportedly establishing a joint venture between TSMC and Intel, which will send engineers to Intel to ensure that the manufacturing industry is viable.
Investors cheered on the report, and Inter scored 38.5% in the five days that ended Tuesday.
However, Wall Street analysts have expressed concern about Intel’s potential split.
Citi analyst Christopher Denary pointed out that TSMC and Intel use separate manufacturing processes. He said that it makes no sense for TSMC to manage the manufacturing facilities, as Intel’s chips are specially designed using a proprietary manufacturing process.
“Just because the two companies are creating the same type of chip, they have completely separate software tools, processes, methodologies, all sorts of things,” he told Yahoo Finance in an interview Wednesday. He spoke. “These people who have worked at Intel for 10, 20, 30 years have to learn a whole new process. It’s just a huge failure.”
TSMC-Intel’s transactions could also face scrutiny from domestic and international regulators. That’s because global regulators, including Chinese authorities, will need to approve the transaction, and they may have antitrust concerns, Wall Street analysts said.
And the Trump administration “could be wary of foreign presence taking over completely iconic US companies,” Bank of America analyst Vivek Arya wrote in a memo to investors on Tuesday. Ta.
Intel has long designed and manufactured its own semiconductors, but in 2022 the company opened up manufacturing to external customers – what is called casting. Market share to rivals. These struggles have made Intel a acquisition target in recent months.
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