Intel‘s position in the semiconductor industry has long been a subject of scrutiny, but recent developments suggest that significant changes are underway. The company’s stock has experienced notable volatility amid reports of a potential takeover of its foundry business by a consortium led by Taiwan Semiconductor Manufacturing Company (TSMC). 

Adding to the shifting landscape, Intel has appointed a new CEO, Lip-Bu Tan, a move that has already sparked a positive market reaction. Financial strategists from Fibonachis explore the implications of these changes and what they mean for the future of the semiconductor industry.

The Rise and Fall of Intel’s Foundry Business

Intel has historically been one of the dominant forces in semiconductor manufacturing. However, as global competition intensified, the company struggled to keep pace with rivals like TSMC, Nvidia, and AMD. In 2024, Intel reported a staggering net loss of $18.8 billion, with its foundry division alone accounting for an $11.6 billion operating loss.

Intel had initially attempted to transform its foundry business into a competitive third-party chip manufacturing arm, hoping to rival TSMC’s dominance. However, the initiative faced significant challenges, leading to the ousting of CEO Pat Gelsinger. The company is now being led by co-CEOs David Zinsner and Michelle Johnston Holthaus while it undergoes restructuring.

TSMC-Led Consortium: A Potential Shift in the Industry

According to reports, TSMC is in discussions with a group of major chipmakers, including Nvidia, AMD, and Broadcom, to take over Intel’s foundry business. This move could have profound implications for the semiconductor landscape, consolidating more manufacturing power under TSMC while altering Intel’s role in the industry.

Following the news, shares of Intel climbed approximately 3% in afternoon trading. Meanwhile, Nvidia, Broadcom, and TSMC also saw stock gains, reflecting market optimism about the potential restructuring.

This development comes as policymakers seek to bolster domestic semiconductor production. The U.S. has historically played a dominant role in chip manufacturing, but its global share has declined from 37% in 1990 to just 12% today. Supply chain disruptions during the COVID-19 pandemic and concerns over geopolitical risks, particularly involving Taiwan and China, have further underscored the urgency of securing semiconductor production within the country.

image from finance.yahoo.com

The CHIPS Act and Investment in U.S. Manufacturing

To counteract these vulnerabilities, the U.S. government has committed substantial funding through the CHIPS Act, a legislative effort designed to boost domestic chip manufacturing. Both Intel and TSMC have received billions in government support, with Intel investing heavily in U.S. expansion projects.

Intel is currently constructing a massive semiconductor campus in Ohio. However, the company recently announced that part of the project is delayed and will not be completed until 2030—five years later than originally planned. TSMC, on the other hand, has pledged $100 billion to build new facilities in Arizona, adding to an existing $65 billion investment in the region.

Market Competition and Intel’s Leadership Transition

Intel is facing intensifying competition, not just from long-time rivals AMD and TSMC, but also from Qualcomm, which is making a renewed push into the PC chip sector. The changing industry dynamics have placed significant pressure on Intel’s leadership to steer the company back to profitability.

In a major leadership shift, Intel announced the appointment of Lip-Bu Tan as its new CEO. Tan, a seasoned industry veteran and former head of Cadence Design Systems, has a history with Intel, having served on its board in 2022 before departing in 2024 over disagreements with the company’s strategic direction. His return as CEO has been met with a strong market response, with Intel’s stock surging more than 11% in after-hours trading following the announcement.

What’s Next for Intel and the Semiconductor Industry?

As Intel navigates this period of transformation, its future hinges on several key factors:

1. The Potential Sale of Its Foundry Business – If the TSMC-led consortium acquires Intel’s foundry division, the company could shift its focus toward design and innovation rather than manufacturing.
2. Government Incentives and U.S. Expansion – Intel’s ability to capitalize on CHIPS Act funding and complete its U.S. manufacturing projects will be critical in maintaining relevance in the industry.
3. Competitive Landscape – With AMD, Nvidia, and Qualcomm aggressively expanding their market positions, Intel will need to refine its strategy to avoid further market share erosion.
4. New Leadership and Strategic Direction – Lip-Bu Tan’s leadership will be crucial in determining Intel’s ability to execute a turnaround plan and regain investor confidence.

Conclusion

Intel is at a crossroads, with both challenges and opportunities shaping its trajectory. The potential sale of its foundry business to a TSMC-led consortium, coupled with a major leadership change, signals a transformative period for the company. Meanwhile, broader industry trends—including supply chain security concerns and government incentives—are redefining the semiconductor landscape. How Intel responds to these shifts will determine whether it can reclaim its position as an industry leader or continue its struggle against intensifying competition.