Intel Stock: Breaking Up Could Boost Value

Intel's stock surged over 6 percent in pre-market trading following reports that the chip giant might be facing a fundamental restructuring. Trading at €23.26, the company has attracted attention from potential suitors looking to dismantle the semiconductor veteran. According to insider information, Taiwan's TSMC and US-based Broadcom are evaluating the economic feasibility of breaking up Intel's operations. Broadcom has expressed interest in Intel's chip design and marketing division, while TSMC is exploring the possibility of acquiring some or all of Intel's production facilities. This potential reorganization could significantly influence the struggling chipmaker's future and reorient its competitive position. Other technology firms, including Qualcomm, had previously signaled interest in Intel business segments last year.

Innovation Could Signal Turnaround

The company's advanced 18A manufacturing technology might represent a turning point for the troubled semiconductor manufacturer. Both Nvidia and Broadcom are currently conducting production tests with Intel's cutting-edge manufacturing process, which is viewed as an early vote of confidence in the technology. Successful tests could lead to significant manufacturing contracts that would provide much-needed momentum to Intel's loss-making foundry business. Reports indicate AMD is also evaluating the 18A technology. Despite these positive signals, financial challenges remain, with the foundry division recording a $13.41 billion operating loss in 2023, an increase from the previous year. Management anticipates the chip manufacturing business won't reach profitability until approximately 2027.

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Source StockWorld