With Intel under the unorthodox leadership of two interim co-CEOs following the abrupt exit of Pat Gelsinger in late 2024, the company appears indecisive at a critical crossroad: should it continue to plow ahead with Gelsinger's Fab-focused, winner-takes-it-all gambit or try to resurrect some shareholder value by offloading its chip fabrication facilities? Today, Baird is out with some distinctive insights into this dilemma.
To wit, Baird analyst Tristan Gerra has cited "discussions from the Asia supply chain" in a new investment note to suggest that Intel might be pivoting towards a closer collaboration with TSMC to get its struggling fabrication units off the ground, so to speak:
"There are discussions from the Asia supply chain that the U.S. government will get involved in potentially the following: TSMC would send engineers to Intel's 3nm/2nm fab, applying the company's know-how to ensure that the fab and subsequent manufacturing projects from Intel become viable."
Gerra goes on to note:
"The fab could be spun off into a new entity jointly owned by TSMC and Intel, and run by TSMC."
While Gerra concedes that there is "no confirmation and potential completion of this project could be lengthy," he asserts that such an approach would make most sense in the current situation, especially as the newly minted entity would be eligible for CHIPS Act funding.
Under this vision, Intel would focus on chip design and platform solutions, benefiting from significant cash savings, while TSMC would handle the nitty-gritty of chip fabrication.
Separately, in what paints a stark picture of Intel's ongoing market share bleed, Citi analysts recently leveraged data from Mercury Research to note that Intel's share of microprocessor shipments in the fourth quarter of 2024 fell by 1.04 percent quarter-over-quarter (QoQ) to just 67.4 percent, constituting "the lowest in our model’s history dating back to 2002."
Intel's loss was AMD's gain, which managed to increase its microprocessor market share by 0.53 percent QoQ to 22.1 percent.
Nonetheless, Intel did manage to increase its share in the desktop segment:
"Intel’s desktop MPU share was up 166 basis points QoQ from 66.4% in 3Q24 to 68.1% in 4Q24."
Lastly, we note that Intel was the fifth most bought stock on the Capitol in 2024, with three Congress members buying the stock eight times over the course of the year, as per a tabulation by MarketBeat. This might be a critical clue for those who believe that tracking the stock trades of Congress members can yield significant alpha.
About the author: Writing is my one incontrovertible passion. Over the past six years, he has authored over 2,200 distinct articles on financial and tech-related topics, spanning nearly 1 million words. And he has been a member of Wcctech mobile team since 2025. As an alumnus of the University of Toronto, Rotman Commerce Program, I bring nuance, in-depth knowledge, and a unique perspective to every topic that I cover. When I'm not writing, I'm traveling the world, exploring hidden confectionaries and restaurants as an aspiring food connoisseur.
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