The past few days have been chock-full of rumors and tidbits regarding Intel's path forward, and the role, if any, that TSMC and Broadcom (AVGO) might play in salvaging the semiconductor industry's quintessential white elephant. Now, Wall Street analysts are out in droves with their insights on this very fluid situation.
Last week, Baird analyst Tristan Gerra cited "discussions from the Asia supply chain" in an investment note to suggest that Intel might be pivoting towards a closer collaboration with TSMC to get its struggling fabrication units off the ground.
Specifically, Gerra pointed to a JV-like arrangement between Intel and TSMC:
"The fab could be spun off into a new entity jointly owned by TSMC and Intel, and run by TSMC."
Separately, we know that Broadcom has also been eyeing Intel's fabs to complement its ASIC design business. Of course, those fabs require a significant induction of capital and talent to attain viability, especially when it comes to sub-2nm nodes.
Over the weekend, we reported that TSMC might acquire a 20 percent stake in Intel's foundry business, either via a cash injection or enabling technology transfer. Other reports suggest that Broadcom and Qualcomm might assist a possible deal by placing sizable orders with Intel's fabs.
This brings us to the crux of the matter. Cantor Fitzgerald analyst C.J. Muse has now hiked the target for Intel shares from $22 to $29, while maintaining an overall neutral rating. The analyst notes:
"The situation at Intel is extraordinarily complex, but where there is smoke, there is typically fire, so we do believe the news reports that suggest a split of DesignCo/IFS is a done deal."
Muse believes that the Trump administration is pushing all concerned parties towards a deal to avoid a "GM like situation," with TSMC likely to emerge as the "most logical manager" for Intel's fabs.
"We believe the current Administration is worried about lack of leadership and current net leverage at Intel (have not found new CEO; negative FCF) and does not want a GM like situation to emerge for the US’ Crown Semiconductor Jewel."
Meanwhile, Bernstein analyst Stacy A. Rasgon wants Broadcom "to stay from the fabs, but would love to see what they could do with the products."
While explaining his rationale, Rasgon argues that Intel's x86 businesses (CCG, DCAI, and NEX) are not necessarily "bad businesses on their own," managing to haul in "~$49B in 2024 sales & mid-20’s operating margin."
Rasgon thinks that even if Intel's products are "potentially ex-growth, x86 CPUs would be complementary to AVGO’s current portfolio, and one would think overall execution should be far better than Intel’s."
The analyst then lays out how a possible deal between Intel and Broadcom should be structured:
"We would recommend an all-stock deal if possible. At a ~75% premium (~$40 take-out price, or a mid-high teens multiple) our rough math suggests 20%+ accretion even in a 100% stock scenario, and with very manageable leverage (well under 3x) across a wide range of capitalization structures."
Of course, not everyone is upbeat on the prospects of Intel managing to spin off its fabs. For one, Bank of America (BofA) analyst Vivek Arya thinks that splitting up Intel "could be time- consuming and complicated given: 1) Extensive approval requirements from global (China) regulators due to INTC’s dominant ~70% share of PC/server CPU, 2) Mismatch between INTC and TSMC’s manufacturing processes, 3) TSMC’s ongoing fab expansion plans in Arizona with ability to serve AI customers, 4) AVGO’s existing low-levered but high debt ($58bn net debt) balance sheet, and 5) Constraints of INTC’s CHIPS Act funding (design needs to own 50%+ of manufacturing) and ROI requirements from co- investment partners Apollo and Brookfield."
Also, Lynx Equity has asked "why would TSM wish to take a stake in Intel’s IFS" given the fact that global fab capacity "at leading and lagging nodes" is no longer in short supply, that Intel's fab business still offers "questionable performance at advanced nodes" and will not break-even until late 2027, and the "IFS’s tortured relationship with the US government via the CHIPS Act?"
Lynx Equity argues that "coercion, via threat of tariffs on semis imports, could be a reason for TSM to come to the table," but that the "gaggle of media reports" in recent days could simply be a "trial balloon."
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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