Taiwan Semiconductor Company (TSM) recently announced a partnership with the US for chip development expansion. The move was a big one for TSMC, but it also sent a message to US-based chip developers like Intel (INTC). Analysts have signaled that TSMC’s steps into the US are endangering US AI stocks, and one of the worst affected may be Intel’s.
CNBC’s Jim Cramer recently spoke about INTC on his Mad Money show, and how the stock could be impacted by TSMC’s US investment. Speaking on a recent episode, Cramer said the following:
“Intel’s now ground zero for the end of government, especially after Taiwan Semi committed $100 billion to build semiconductor foundries here in America. That brings a total of $165 billion. They made a previous commitment. Who the heck needs Intel? I don’t know where it fits in the president’s plans, other than being a poster child for President Trump’s view of President Biden’s legacy.”
Intel (INTC): The Future Shadowed by TSMC?
Intel (INTC) already sits on the lower shelf of most investment experts’ radars. The stock is rivaled by Nvidia (NVDA), AMD, and plenty of other AI stocks. Intel hasn’t had the best success over the last few years, but has made many moves in the past year to push forward.
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For example, a recent Bloomberg report revealed that the chipmaker is planning to cut more than 20% of its staff. The layoffs are part of Intel’s bid to streamline its operations, Bloomberg said. Furthermore, Intel announced the sale of a 51% stake in its Altera chips unit to Silver Lake, a tech-focused private equity firm, in early April. New CEO Lip-Bu Tan has made many moves to try to return Intel to the top of the AI/tech sector. However, the top of that mountain remains very crowded.
This explains why Cramer and other analysts don’t value INTC stock as high as rivals NVDA or AMD. INTC is down 9.7% in the last month, trading at 20.50 on Monday. With TSMC now throwing a wrench in things, investors are mixed on INTC’s future in 2025.