Intel: TSMC & Broadcom Eye Key Assets, but Regulatory Hurdles Loom

• Intel is in early discussions with TSMC and Broadcom for a potential joint venture or acquisition.

• TSMC is exploring control over Intel’s Foundry business but requires U.S. regulatory approval.

• Broadcom is interested in Intel’s design assets, aligning with its growth strategy.

• Intel’s stock surged 24% last week but remains uncertain due to regulatory and deal structure risks.

• CHIPS Act restrictions require Intel to maintain key control over its Foundry business if spun off.

• Intel has $50.7 billion in debt, and a deal could help reduce financial strain.

• Uncertainty around negotiations keeps Intel at a Hold rating.

  
  

Intel has been at the center of takeover speculation, with reports suggesting Taiwan Semiconductor (TSMC) and Broadcom (AVGO) are looking to acquire parts of the company. These discussions, still in the early stages, could result in a joint venture or asset sale that restructures Intel’s operations.

TSMC, which previously distanced itself from Intel, is now exploring a joint venture for Intel’s Foundry business. The feasibility study focuses on acquiring Intel’s chip plants, particularly its 18A process node and proprietary PowerVia technology. However, such a deal would require U.S. government approval. Reports suggest that the Trump administration supports the move, with Commerce Secretary nominee Howard Lutnick involved in the discussions. If finalized, TSMC might lead a consortium of investors, including private equity firms and semiconductor companies, to structure the acquisition.

Broadcom has reentered the picture with an interest in Intel’s design assets. CEO Hock Tan is known for streamlining businesses after acquisitions, and he could reshape Intel’s design segment, likely keeping Data Center & AI assets while selling off other divisions. If Broadcom proceeds, a possible scenario could involve selling Intel’s Client design business to a company like Qualcomm. This would be similar to Broadcom’s strategy after acquiring VMware, where it divested non-core business units to focus on profitability.

Intel’s stock jumped 24% last week, marking its best weekly performance in over two decades. The company is currently valued at around $102.19 billion, trading close to its book value. However, despite the market optimism, there are risks that could derail these deals. Regulatory approval remains a major hurdle, and CHIPS Act restrictions require Intel to retain key control over any spun-off Foundry assets. If negotiations fail or the government shifts its stance, Intel’s stock could face downward pressure.

For now, the uncertainty surrounding these takeover discussions keeps Intel at a Hold rating. While a deal could unlock significant value, the complexity of regulatory approvals and deal structures makes it difficult to predict an outcome. Investors should remain cautious as discussions progress.

TL;DR:

Intel is in takeover talks with TSMC and Broadcom, but regulatory and strategic hurdles make the outcome uncertain. Stock surged 24%, but risks remain, keeping it at a Hold rating.