Intel (Intc) shares fell by 6% on Wednesday and ended a huge revival in which shares achieved their biggest five -day profit in Intel’s history as a listed company. The decline came when analysts expressed skepticism about recent reports of potential deals with TSMC (TSM) and Broadcom (AVGO) to break the legendary American chip maker.
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Shares of Intel had risen 16% on Tuesday after a Wall Street Journal report during the weekend that the rival, Taiwan’s contract chip manufacturer TSMC, looked at checking some or all of the semiconductor factories of Intel, possibly as part of an investor consortium. The magazine, which makes people familiar with the discussions, also reported that Broadcom (AVGO) is considering making an offer for Intel’s product company, which designs semiconductors for computers and servers.
A news item the previous week indicated that the US was floating proposals to TSMC to support the turn of Intel. One of the proposals is said to bring a joint venture between TSMC and Intel, in which TSMC would send engineers to Intel to ensure that the production company is viable.
Investors welcomed the reports, in which Intel won 38.5% during the five days that ended on Tuesday.
But Wall Street analysts have expressed their concern about a potentially disintegration of Intel.
Citi analyst Christopher Dany on noted that TSMC and Intel use individual production processes. Because the Intel chips were specifically designed using his own production processes, it would not be logical for TSMC to take control of the production facilities, he said.
“Only because two companies make the same type of chip do they have fully separate software tools, processes, methods, all kinds of things,” he told Yahoo Finance in an interview on Wednesday. “These guys who have worked at Intel for 10, 20, 30 years should learn completely new processes. It would just be a fiasco. ‘
A TSMC intel-deal can also be confronted with the control of supervisors at home and abroad. That is because worldwide supervisors, including the Chinese authorities, should approve the deal, and they can have antitrust problems, according to analysts of Wall Street.
And the Trump administration “could be wary of a foreign entity that completely takes over an iconic American company,” wrote Bank of America analyst Vivek Arya on Tuesday in a note to investors.
Intel has long designed and produced semiconductors for itself, but the company has opened its production company for external customers – launching a foundry in 2022. Market share for rivals. Intel have made those struggles in recent months an acquisition objective.
