Intel shares gained 6% on Wednesday after Semafor reported the company is having preliminary discussions to bring Advanced Micro Devices (AMD) on board as a customer for its chip-manufacturing operations.
If a deal materializes, it would represent a significant vote of confidence in Intel’s efforts to revive its manufacturing division after years of lagging behind rivals such as Taiwan Semiconductor Manufacturing Company (TSMC).
Intel shares rose around 6.8% on the news, although it pared some gains and was trading at $35.16, up by 4.8%, extending year-to-date gains of more than 75%.
White House and industry support boost Intel
Over the past seven weeks, Intel has secured notable backing from government and industry stakeholders.
The company has attracted investment dollars and public endorsements from the White House, Nvidia, and SoftBank.
Intel is also in discussions with Apple for potential support, according to previous reports.
The interest in Intel comes as the Trump administration has emphasized its desire to strengthen US-based chip manufacturing.
With national security and supply chain resilience in focus, American companies have been encouraged to diversify away from overseas dependence, particularly in light of Taiwan’s strategic vulnerabilities.
While Intel’s manufacturing facilities are widely considered less advanced than TSMC’s, several US companies have already directed at least some of their less complex chip production to Intel’s domestic foundries.
This aligns with the administration’s push to establish a stronger American semiconductor champion.
Potential benefits and challenges for AMD
AMD, which primarily relies on TSMC for its chip production, could benefit from diversifying its manufacturing base, particularly amid shifting US trade and export rules.
Earlier this year, the company’s business in China was hit by restrictions on advanced chip exports.
The White House recently loosened some of those measures, providing AMD with temporary relief.
It is unclear, however, how much of AMD’s manufacturing would move to Intel if an agreement is reached.
Intel currently lacks the technical capabilities to produce AMD’s most advanced and profitable chips, limiting the potential scope of such a deal in the near term.
Semafor report indicated that the discussions remain early stage and that no agreement may ultimately be finalized.
The possibility of AMD becoming an Intel foundry customer underscores the complex dynamics in the semiconductor industry.
Although competitors in the marketplace, AMD and Intel may find common ground in strengthening US chip supply chains, particularly as AI and other high-performance computing needs accelerate global demand.
Intel’s Competitive Position and Market Outlook
For decades, Intel dominated the personal computing market, producing chips that powered the vast majority of laptops and desktops.
However, the company has struggled in recent years as the rapid adoption of artificial intelligence workloads, driven largely by Nvidia, left Intel at a disadvantage in cutting-edge technologies.
Intel has responded by seeking customers and investors for its manufacturing business, presenting its foundries as a strategic alternative for companies aiming to diversify supply chains.
The company has also sought to bolster its credibility with cost-conscious partners by offering production capacity for less advanced chips.
While the potential AMD agreement remains uncertain, the talks add momentum to Intel’s broader narrative of rebuilding trust in its manufacturing arm.
Industry analysts note that even incremental deals with high-profile companies such as AMD could improve Intel’s positioning as it works to regain competitiveness.
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