Intel Stock Surges Over 10% as TSMC and Broadcom Consider Split Deals; Up 18% Year-to-Date

On Tuesday, February 18, Intel’s stock price jumped more than 10% following a weekend report suggesting that Taiwan Semiconductor Manufacturing Co. (TSMC) and Broadcom were both considering strategic moves that could potentially lead to the chipmaking giant being split into two entities. Speculation surrounding a possible breakup fueled Intel Corp.'s stock rally.

According to Bloomberg News, TSMC has reportedly explored the idea of managing Intel’s U.S. manufacturing facilities while acquiring a controlling interest in the venture. Meanwhile, the Wall Street Journal reported that Broadcom has informally consulted advisers about potentially acquiring Intel’s chip-design and marketing division. Discussions surrounding a possible Intel split have been ongoing among investors and analysts since last year. However, Intel has stated that the decision to separate its manufacturing and product-development divisions remains uncertain.

Intel Share Price Update

Intel share price surged to $26.24 during Tuesday’s trading session in New York, marking the most significant single-day gain since October 27, 2023. The stock had already risen 18% year-to-date (YTD) by the end of last week, largely driven by speculation regarding a potential split.

In another development, Bloomberg News reported that Silver Lake Management is engaged in exclusive discussions to acquire a majority stake in Altera, Intel’s programmable chip unit. Although negotiations are at an advanced stage, the exact percentage of the stake sale has yet to be determined.

Challenges and Strategic Considerations

Once a dominant force in the semiconductor industry, Intel has faced increasing challenges in regaining its technological leadership. The company has lost market share to competitors after failing to capitalize on the transition to artificial intelligence (AI) accelerators, allowing Nvidia to establish a strong lead. As a result, Intel’s board removed CEO Pat Gelsinger due to the slow progress of his turnaround strategy, and the company is currently in search of a new leader.

Bloomberg had previously reported that Broadcom explored the possibility of an Intel deal last year but did not proceed with formal negotiations. Advisers have continued to present various strategic options to Broadcom. The TSMC factory plan could potentially pave the way for an acquisition of Intel’s product-development unit, but neither scenario has progressed beyond the preliminary stage.

Regulatory and Government Considerations

The prospect of a Taiwan-based company managing Intel’s U.S. factories has also raised political concerns. While some Trump administration officials reportedly discussed the possibility in recent meetings, a White House representative indicated last week that President Biden would likely oppose the idea of a foreign entity taking control of Intel’s manufacturing operations.

Intel has been a key beneficiary of the U.S. government's push to strengthen domestic semiconductor production, an initiative championed under former President Joe Biden’s administration. In November, the U.S. Commerce Department announced that it was finalizing a $7.86 billion subsidy package for Intel. The company remains one of the few semiconductor firms involved in both designing and manufacturing chips.

Despite these efforts, Intel’s stock value had plummeted by approximately 60% last year.