The U.S. government could potentially be seeking suitors for Intel (INTC), according to an exclusive Semafor report. The report notes that policymakers in Washington are increasingly concerned about the chipmaker’s stability.
Don't Miss Our Christmas Offers:
- Discover the latest stocks recommended by top Wall Street analysts, all in one place with Analyst Top Stocks
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
Officials from the Commerce Department, which administers CHIPS funding to boost American semiconductor production, and influential lawmakers like Senator Mark Warner are reportedly exploring whether the company needs more assistance. The report stated that these discussions are “purely precautionary.” The U.S. considers Intel strategically important to its supply chain, especially amid global competition with China’s growing chip industry.
Potential Suitors for Intel Include AMD and Marvell
As a result, various strategies are being considered for Intel, including a potential merger of Intel’s chip design unit with AMD (AMD) or Marvell Technology (MRVL). This move would allow Intel to focus on its core manufacturing business, which is central to government support via the CHIPS Act.
Under this act, Intel is set to receive around $30 billion in funding through grants and low-interest loans, but these funds have yet to be disbursed.
Additionally, Intel has contemplated separating its design and manufacturing units. If the design business were acquired by a chip major like AMD, the U.S. government funding could exclusively bolster Intel’s manufacturing.
Is Intel a Buy, Hold, or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on one Buy, 22 Holds, and seven Sells assigned in the past three months, as indicated by the graphic below. After a 34.5% loss in its share price over the past year, the average INTC price target of $24.43 per share implies 0.08% downside potential.
