Intel Surges 7% on AMD Partnership Talks
Reports of a potential foundry deal with its chief rival are seen as a major validation of Intel's manufacturing strategy.
Intel shares surged more than 7% in heavy trading following reports that the chipmaker is in early-stage talks to manufacture processors for its primary competitor, Advanced Micro Devices (AMD).
The potential collaboration marks a significant development in the semiconductor industry, representing a major endorsement of Intel's ambitious plan to operate as a foundry for other chip designers. For years, AMD has relied almost exclusively on Taiwan Semiconductor Manufacturing Company (TSMC) for its production needs. A move to diversify its supply chain with its chief rival would be a landmark shift.
, with Intel's stock climbing 7.12% on trading volume that reached $5.6 billion. The discussions, first reported by Semafor, are viewed by investors as a crucial validation of the turnaround strategy helmed by CEO Pat Gelsinger. Under Gelsinger, the company has invested billions into its Intel Foundry Services (IFS) division, aiming to compete directly with TSMC and Samsung for high-value manufacturing contracts.
Analysts see a potential AMD partnership as a powerful signal to the market. Securing a high-profile customer like AMD could persuade other fabless chip companies to consider Intel's manufacturing capabilities. "This development, if it materializes, would be a substantial validation of Intel's manufacturing capabilities and could encourage other fabless chip companies to consider IFS," noted one industry report. This move also aligns with the White House's strategic push to increase and reduce reliance on overseas production hubs.
However, , emphasizing that Intel still faces a long road in its recovery. The company's foundry technology is still widely perceived as being a generation behind TSMC's leading-edge processes. While recent strategic investments from the U.S. government and partnerships with companies like Nvidia have bolstered confidence, IFS must secure significant, high-volume customers to achieve long-term viability.
The talks with AMD, while still in their infancy, represent a critical test for Intel's foundry ambitions. A successful partnership would not only reshape the competitive dynamics of the x86 processor market but also signal that Intel's bold manufacturing pivot is beginning to pay dividends.