Shares in Intel (INTC) were up 16.1% yesterday at US$27.39 - the stock’s best trading day since March 2020 - after media reports suggested both chip designer Broadcom (AVGO) and Taiwan Semiconductor Manufacturing (TSM) were weighing up bids to take out different parts of the embattled chipmaker.
According to the Wall Street Journal, Broadcom is eyeballing the company’s chip design and marketing segment, while TSMC is more interested in a stake or complete control of Intel’s factories.
While news led other chipmaker stocks higher on Tuesday, Broadcom and TSMC shares were down 2.2% and 1.3% respectively.
Takeover talks surrounding the iconic American chipmaker remain informal, no formal bids have been filed and there are no suggestions that Broadcom and TSMC are collaborating on any future bid.
Yesterday’s share price rally follow Intel's 6% rise last week after Vice President JD Vance suggested America will protect AI technologies from foreign adversaries and promised that more AI chips would be made on U.S. soil.
However, Vance’s comments are at odds with recent Trump administration comments which are said to have encouraged TSMC to make a takeover offer for Intel.
Recent rallies which have pushed Intel shares up nearly 31% this year are welcome relief for shareholders who have witnessed the U.S. chipmaker shed around 60% of its value due to a string of operational challenges.
It’s also alleged that the company has failed to capitalise on AI as a much as the broader semiconductor sector in recent years.
Last August, Intel shares witnessed their worst day on the stock market in 50 years, falling to their lowest level since 2013 following a dismal quarterly result in which Intel disclosed it would axe 15% of its employees.
A month later, with Intel appearing to be undervalued, potential suitors started to surface to take the company out.
Qualcomm was the first rival stock to approach the company about a potential takeover.
Three months later, the Intel board removed CEO Pat Gelsinger in December after losing confidence in his strategy to turn the fortunes of the underperforming and embattled chipmaker around.
