Intel Corp. (NASDAQ: INTC), the huge but beaten-down chip company, could break up, ending the board’s turnaround effort. Taiwan Semiconductor Mfg. Co. Ltd. (NYSE: TSM) and Broadcom Inc. (NASDAQ: AVGO) are reviewing how they might each take a piece of what was once one of America’s premier tech companies.
24/7 Wall St. Key Points:
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Reports suggest that Intel Corp. (NASDAQ: INTC) may be broken up, ending the board’s turnaround effort.
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If it doesn’t happen, there is likely no good news for current shareholders.
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The Wall Street Journal reports that Broadcom is interested in Intel’s chip design operations. Meanwhile, Taiwan Semiconductor might want Intel’s chip plants. The projects are still in the early stages and Intel has received no offers. Yet, this may be the only positive exit for investors who have watched its shares crater.
That’s share price has fallen over 64% in the past five years, while the S&P 500 has increased 81% in the same period. Intel was once the world’s leading chip company and was among the largest public corporations in the United States from 2007 to 2016. It was also among America’s top 50 companies based on revenue on the Fortune 500 list in 2012.
Intel was the leader in supplying chips for personal computers for over a decade and was the dominant chip provider for commercial servers. Andy Grove, CEO from 1987 to 1998, was Time’s “Man of the Year” in 1997. Many still consider him one of the most outstanding CEOs in tech history.
The company made two major mistakes that cost it the chip industry lead. It was late entering the mobile chip market and never made a run at AI chips, leaving most of that business to Nvidia Corp. (NASDAQ: NVDA). Intel’s market cap today is $108 billion, while Nvidia’s is $3.4 trillion.
Intel’s most recent chief executive, Pat Gelsinger, was forced out in early December. The board and interim senior management now run the company.
If Intel does not break up, there is likely no good news for current shareholders.
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