The rumor mill runs overtime over struggling Intel (Intc) while the technical icon is looking at ways to create shareholder value.
Chip Rivals Taiwan Semiconductor (TSM) and Broadcom (AVGO) are every Eying -Deals with Intel that could break the company, the WSJ reported this weekend.
Broadcom is said to be looking for control over the lucrative chip design and marketing company of Intel. Taiwan Semiconductor is reportedly studying a few or all Intel’s chipping plants.
An Intel spokesperson did not immediately return Yahoo Finance for comments.
A disintegration could extract a large piece of value for shareholders of long -suffering Intel, estimates Evercore analyst Mark Lipacis.
In an analysis of the Intel company, Lipacis said that Intel is worth conservative $ 167 billion or $ 38.24 per share. Intel’s share was closed on Friday at $ 23.60, about 50% fell around 50% in the past year. In the past five years, the share has crashed 65% to a market capitalization of $ 102 billion.
With the help of more robust projections of financial performance for each company, Lipacis estimates that Intel could be worth $ 237 billion or $ 54.18 per share.
A path to a deal can be difficult, says Lipacis.
“Depending on how a deal is structured, it may require legal approval from countries around the world, including China,. Intel has also historically designed its factories to make X86 CPUs, so it is not clear whether the Intel factories of Intel external could make chips efficiently with its current physical factory.
Wall Street analysts at Raymond James, Bank of America, and Bernstein repeated concern about legal obstacles and antitrust issues, in which Vivek Arya of the Bank of America said: “Every potential Intc split can be time-consuming and complicated.”
In addition, every deal with TSMC and the production company of Intel would be confronted with tight limitations, given the rules of Intel’s Chips Act financing, where Intel must retain ownership of more than 50% of the foundry, Arya wrote on Tuesday morning in a note to investors.
The Trump administration “could be wary of a foreign entity that fully takes over an iconic US firm that has a deep involvement with customers of the US Department of Defense,” Arya wrote.
Raymond James analyst Srini Pajjuri said in a comment that “[A] better result for [the] The US government would be to work with TSM separately to expand its American manufacturing feature print. “
Intel received $ 3 billion in US government financing in September to produce chips for the army.
