The U.S. government’s announcement to develop AI using domestically produced semiconductors has sparked a rally in Intel Corporation’s stock. The company’s shares surged over 7% following news of a partnership with Taiwan’s TSMC.
On Thursday, Intel’s stock jumped 7.34% to $24.13 on the New York Stock Exchange.
The surge is attributed to Intel’s efforts to strengthen its foundry (contract manufacturing) division through collaboration with TSMC, a move seen as critical given the company’s recent struggles.
Baird analyst Tristan Gerra informed clients that Intel, TSMC, and the U.S. government are discussing deploying TSMC engineers to Intel’s manufacturing facilities.
Gera also suggested the possibility of Intel spinning off its foundry business into a joint venture with TSMC.
This news drove Intel’s stock up more than 7% today.
Following reports of increased U.S. government support for domestic semiconductor production, the company had already posted gains of 7% and 6% in the previous two trading sessions. This marks Intel’s third consecutive day of strong gains.
On Tuesday, U.S. Vice President JD Vance, speaking at an AI summit in Paris, emphasized that the Trump administration aims to safeguard American interests by ensuring that the most advanced AI systems are built in the U.S. using domestically designed and manufactured chips.
While most American semiconductor companies, like Nvidia, focus on chip design and outsource production to firms such as TSMC, Intel stands out by manufacturing its own semiconductors.
As a result, Vance’s remarks fueled speculation that Intel would be the primary beneficiary of this policy shift, further driving its stock rally.