Advanced Micro Devices: Potential Intel Foundry Customer?
Reports suggest that Advanced Micro Devices (AMD) is considering becoming an Intel Foundry customer, potentially following in the footsteps of several other companies that have provided a lifeline to the struggling chipmaker. This development comes as the U.S. government emphasizes domestic semiconductor manufacturing in an effort to outcompete China in the global AI race. However, some analysts question whether Intel has sufficient manufacturing capabilities to secure the kind of foundry deal that President Trump and Wall Street are anticipating.
Intel’s Resurgence on Wall Street
Not long ago, Intel (INTC) saw its stocks plummet. However, a strategy shift by the White House has transformed it into one of the hottest stocks on Wall Street.
Potential Collaboration Between AMD and Intel Foundry
According to Semafor, chip designer AMD is in early talks of possibly becoming an Intel Foundry customer. It remains uncertain whether AMD will shift a significant portion of its business from its main manufacturing partner, Taiwan Semiconductor Manufacturing Co. (TSM), to Intel or whether the deal will involve a direct investment.
What This Means for Intel Investors
The White House’s aggressive push to support Intel has resulted in major tech companies rallying behind the beleaguered chipmaker. However, none of these partnerships have included commitments to use Intel’s foundry. A manufacturing deal would demonstrate more concrete support for Intel, potentially boosting investor confidence in the longevity of its turnaround.
AMD Joins Intel’s Network of Partnerships
If the agreement goes through, AMD would join a growing list of entities partnering with or investing in Intel to bolster one of the few U.S. companies capable of manufacturing advanced semiconductors. This wave of support includes a $2 billion investment from Japanese tech investor SoftBank and a subsequent $5 billion investment and product partnership from Nvidia (NVDA).
Intel’s Popularity Soars
Since these shows of support, Intel’s stock has skyrocketed, doubling in value since its year-to-date low in early April and rising about 80% since a meeting between CEO Lip-Bu Tan and President Donald Trump in early August. It was after this meeting that discussions of the government taking a stake in Intel seemed to flip the script in its favor.
Reviving American Manufacturing: A Priority for President Trump
President Trump has prioritized reviving American manufacturing during his second term, with a focus on semiconductors given their relevance in the ongoing U.S./China AI arms race. The White House sees Intel as America’s best shot at producing the advanced chips necessary to secure technological and military superiority.
Securing AMD as a Foundry Customer: A Victory for Intel
If AMD becomes a foundry customer, this would represent a significant victory for Intel, which has struggled for years to compete with TSMC, the world’s largest and most advanced contract chip maker.
Skepticism Regarding a Foundry Deal
Despite these developments, some analysts express doubts that a foundry deal will materialize. They argue that Intel’s issues with its manufacturing processes, combined with the competitive rivalry between Intel and AMD, make such a deal unlikely in the near term. Nonetheless, investments from the government and tech partners could give Intel the capital it needs to enhance its processes, but this will take time, and definitive foundry announcements may have to wait until Intel can prove its capability.
Read More US Economic News