Intel Stock Is Soaring. This Chip Giant Could Be the Latest to Invest.

Intel stock has jumped more than 70% this year. (Photo by I-Hwa CHENG / AFP) (Photo by I-HWA CHENG/AFP via Getty Images)

Key Points

• Intel shares are rising amid speculation of an Apple investment and reports of Intel approaching TSMC for a partnership.
• Intel CEO Lip-Bu Tan discussed a partnership or joint venture with TSMC, not a sale of Intel’s chip fabrication facilities.
• A partnership with Intel could help TSMC accelerate US production and potentially avoid future tariffs amid US government pressure.

Intel shares continue to grind higher as speculation continues about a potential investment from Apple . The stock could be getting a further boost on a Wall Street Journal report that Intel has also approached Taiwan Semiconductor Manufacturing .

Intel shares were up 2.9% in early trading, set to add to a more than 50% gain in the past three months.

The stock already jumped earlier this week, after Bloomberg reported that Intel had approached Apple asking for an investment, citing people familiar with the matter and noting that talks have were at an “early stage.” Intel declined to comment on the report and Apple didn’t respond to a request for comment.

As for Taiwan Semiconductor, also known as TSMC, the idea of taking a stake in its U.S. rival isn’t new. Reports earlier this year suggested TSMC had looked at essentially carving up Intel’s operations between itself and an alliance of chip designers such as Nvidia , Broadcom , and Advanced Micro Devices.

However, the balance of power between the two companies appears to have shifted since the U.S. government took a 10% stake in Intel and the chip maker received investment from Nvidia and Japan’s SoftBank. Intel CEO Lip-Bu Tan spoke with TSMC Chief C.C. Wei about a partnership or joint venture, rather than a sale of Intel’s chip fabrication facilities, according to the WSJ.

TSMC declined to comment on the report. Intel didn’t immediately respond to a request for comment Friday.

It isn’t clear if such an arrangement would be attractive for TSMC. Funding Intel would mean essentially helping a chip-manufacturing rival and would be an additional expense on top of the Taiwanese company’s $165 billion investment pledge in U.S. operations.

However, there are political considerations for TSMC. The Trump administration is pushing for increased domestic chip production. The White House’s latest plan could involve obliging chip companies to manufacture the same number of semiconductors in the U.S. as their customers import from overseas producers, the Journal reported on Friday, citing anonymous sources.

While TSMC is ramping up American production, it is still a long way off being able to match its Taiwan capacity in the U.S. The company has previously said it intends to produce about 30% of its most advanced processors in the U.S. by 2030.

A partnership with Intel could speed up that process and help TSMC avoid any threat of future tariffs.

American depositary receipts of TSMC were down 1.8% in morning trading.

Write to Adam Clark at adam.clark@barrons.com