Intel stock jumped 10% Tuesday following a report that its rivals Broadcom and TSMC are exploring potential deals with the chipmaker that would split it into two. The report, which was published by The Wall Street Journal, cited people familiar with the matter and stated that Broadcom is considering making a bid for Intel's product business, which designs semiconductors for computers and servers. Meanwhile, TSMC has looked at controlling some or all of Intel's factories, potentially as part of an investor consortium. The companies have not submitted deals to Intel, and the talks are preliminary and informal.

The news of the potential deals has sent Intel's stock soaring, with the company's shares notching their biggest weekly gain since 2000 last Friday. The US government has signaled support for domestic chipmaking and reports have surfaced that the US government is working with TSMC to support Intel's turnaround efforts. Intel's manufacturing business primarily makes chips for itself, but opened up a foundry in 2022 under the leadership of then-CEO Pat Gelsinger. Gelsinger had pushed to launch a foundry business competitive with Taiwan's TSMC in an attempt to right Intel's struggling manufacturing division, which had suffered from setbacks since the mid-2010s.

However, the turnaround effort has not been successful to date, given that Intel's manufacturing business has struggled to take on outside customers and continues to bleed cash. Intel's earnings disappointed investors throughout 2024, and the stock fell around 60% last year. Gelsinger was ousted by Intel's board in December, and the company has become an acquisition target. The interest from Broadcom and TSMC follows reports of potential takeovers by Qualcomm, Arm, and Apollo last year. Wall Street analysts have favored Intel splitting its business into two, with Raymond James analyst Srini Pajjuri writing in a note to investors that "splitting Intel Product and Foundry is the key to unlocking value."

Some of the key points to consider in the potential deals include: * Broadcom's potential bid for Intel's product business * TSMC's interest in controlling some or all of Intel's factories * The potential for an investor consortium to be involved in the deal * The impact of the US government's support for domestic chipmaking on the potential deals * The potential for Intel to split its business into two, with its product and foundry businesses being separated. Intel announced plans last year to establish an independent subsidiary for its foundry business, separating its finances and operations from its products division. Analysts viewed the move as the company paving the way for a potential split, though Intel's US CHIPS Act funding limits its ability to fully sell its manufacturing business.

The potential deals between Intel, Broadcom, and TSMC are still in the preliminary stages, and it remains to be seen whether they will come to fruition. However, the news has sent shockwaves through the tech industry, with many analysts believing that a split could be the key to unlocking value for Intel's shareholders. The company's stock has been on a tear over the past week, and it will be interesting to see how the situation develops in the coming weeks and months. With the technology industry evolving at a rapid pace, the potential deals between Intel, Broadcom, and TSMC could have significant implications for the future of chipmaking and the tech industry as a whole.