Shares of Taiwanese semiconductor (NYSE: TSM) rose today even though there was no company-specific news on the stock. Instead, investors seemed to react positively to the news Intel CEO Pat Gelsinger had retired over the weekend, apparently because he was kicked out after the stock was wiped out under his tenure.
Shares of TSMC rose on the news, as Gelsinger’s departure appears to mark a setback in Intel’s foundry strategy. As of 1:10 PM ET, shares of Taiwan Semi were up 5.2%. Notably, Intel shares also rose today, rising 3.5% at the same time.
Start your morning smarter! Wake up with Breakfast news in your inbox every market day. Register for free »
Gelsinger’s trademark initiative as CEO of Intel had been an attempt to open Intel’s foundry operations to external customers, essentially mimicking TSMC’s business model. That was also the key to Intel getting billions in funding from the CHIPS Act.
Gelsinger announced a goal to make Intel the world’s second-largest contract chip manufacturer behind TSMC, but that goal is now in question now that Gelsinger is no longer at the helm.
It’s unclear what the future of Intel Foundry Services is, but any delay in buildout or plans will likely benefit TSMC. In the press release announcing Gelsinger’s retirement, Intel said the leadership structure of the foundry business remains unchanged.
TSMC dominates the contract chip market with more than 50% market share in third-party chip manufacturing and approximately 90% in advanced chip manufacturing. Undoubtedly, Intel emerged as the biggest threat to the company under Gelsinger, but that threat has likely diminished.
Intel is still losing billions every quarter in the foundry sector, and the next CEO may not see this as the same growth opportunity. Regardless, today’s announcement from Intel is a good sign for TSMC.
Have you ever felt like you missed the boat on buying the most successful stocks? Then you would like to hear this.
On rare occasions, our expert team of analysts provides a “Double Down” Stocks recommendation for companies they think are about to pop. If you’re worried that you’ve already missed your chance to invest, now is the best time to buy before it’s too late. And the numbers speak for themselves:
-
Nvidia: If you had invested $1,000 when we doubled in 2009, you would have $358,460!*
-
Apple: If you had invested $1,000 when we doubled in 2008, you would have $44,946!*
-
Netflix: If you had invested $1,000 when we doubled in 2004, you would have $478,249!*
