TSMC, Broadcom Explore Dividing Intel—What’s at Stake?

Intel Faces Potential Breakup as Broadcom and TSMC Weigh Strategic Bids

Intel is at the center of a potential industry shake-up, with Broadcom and Taiwan Semiconductor Manufacturing Co. (TSMC) reportedly considering acquiring different segments of the company. These talks, still in preliminary stages, could split Intel into separate design and manufacturing entities, raising questions about the future of the once-dominant U.S. chipmaker.

Who Wants What?

Broadcom is assessing Intel’s chip design and marketing divisions, while TSMC is considering acquiring its manufacturing business. According to reports, Broadcom has engaged advisers regarding a possible bid but is unlikely to proceed unless it secures a partner for Intel’s foundry operations. TSMC, meanwhile, is evaluating whether to take control of Intel’s factories, potentially as part of a consortium.

The two companies are not working together, and discussions remain informal. However, the U.S. government has a vested interest in Intel’s future, given its role in domestic semiconductor production. Reports suggest the Trump administration is pushing for Intel’s U.S. manufacturing assets to remain under American control, potentially complicating any foreign ownership.

Government Involvement and National Security Concerns

Intel has been a major beneficiary of U.S. government support, receiving up to $7.86 billion under the CHIPS Act to expand domestic production. This financial backing highlights Intel’s strategic importance, making any foreign takeover of its manufacturing operations a politically sensitive issue.

While the Trump administration appears open to TSMC expanding its presence in the U.S., officials have expressed reluctance to allow a foreign entity to control Intel’s domestic foundries. The White House’s stance could play a key role in shaping any potential deal.

Intel’s Stock Rally: Sustainable or Speculative?

Recent speculation around a government-backed restructuring has fueled a surge in Intel’s stock price, squeezing short sellers. However, analysts remain skeptical about a fundamental turnaround. Bernstein’s Stacy Rasgon noted that while political developments and headlines have driven short-term gains, Intel’s core business challenges remain.

The company’s manufacturing strategy under former CEO Pat Gelsinger strained cash flow, leading to workforce cuts and lost contracts. Without a clear operational improvement, Intel’s stock movement appears more driven by speculation than by business fundamentals.

What’s Next for Intel?

A potential Intel breakup would mark a significant shift in the semiconductor industry. If TSMC acquires Intel’s foundry business, it would expand its U.S. footprint while reducing geopolitical risks tied to China. Broadcom’s interest in Intel’s design unit suggests a strategic play to strengthen its position in chip development.

For traders, the key factors to watch include government intervention, regulatory hurdles, and how Intel’s leadership navigates this potential restructuring. Any formal bid from Broadcom or TSMC could trigger further volatility, making Intel a stock to monitor closely in the coming weeks.

More Information in our Economic Calendar.