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Intel (INTC) stock is getting a boost in Wednesday's pre-market trading after a Reuters report suggests that Taiwan Semiconductor Manufacturing Company (TSM) approached fellow chipmakers Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), Qualcomm (QCOM) about a potential deal for Intel's foundry business.
Brad Smith and Madison Mills break down the stock reaction to this report.
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
First up, we gotta talk about shares of Intel. They're jumping right now by about 4.6%. After a report from Reuters suggesting Taiwan Semiconductor approached other chip makers about a potential deal for Intel's chip foundry. Now TSMC would hold no more than half of the joint venture according to the report. Nvidia, AMD, Broadcom, and Qualcomm were all approached about the potential deal and that is moving shares of Intel higher here. Uh this also kind of runs synonymous with TSMC and what they had pledged ultimately in terms of a hundred billion dollars in their investment into the US. Uh that was made early in March I believe. Um so ultimately as we see some of those dollars start to get put to work here, it's a question of how strategically they could bring on more fabrication processes which is what TSMC in the wafer fabrication has largely been known for and is the essentially worldwide market leader within that effort too.
Yeah, it's really interesting to see Intel being another beneficiary of this, particularly given that we've continued to see Intel being among the better performers of the Philadelphia Semiconductor index though, of course, the last few days of selling have weighed on that dynamic. Having said that, I I think that this makes a lot of sense for the Intel story because they have been struggling so much with their foundries. Obviously, any type of partnership with TSMC would potentially be beneficial with them, but we should mention that the Trump administration had uh talked about that hundred billion dollar investment in TSMC. So any movement from TSMC here would have to get approval from the Trump administration though this does seem like exactly what the administration is aiming for when it comes to boosting American production and involvement in chips creation and of course you got Intel shares up nearly 5% off the back of this news.