Intel shares jumped 6% after reports emerged that the company is in early talks with longtime rival AMD to manufacture chips through its struggling foundry business. The potential partnership represents a dramatic shift in semiconductor dynamics, as competitors consider collaboration amid Intel's ongoing turnaround efforts under CEO Lip-Bu Tan.
The semiconductor world got a jolt Tuesday as news broke that Intel is in early discussions with AMD about manufacturing chips through its foundry services. The revelation, first reported by Semafor's Rohan Goswami, sent Intel shares climbing 6% while AMD remained flat.
This potential partnership represents more than just business - it's a seismic shift in how these decades-long rivals view each other. Intel and AMD have been locked in fierce competition since the 1980s, battling over x86 processor dominance in PCs and servers. Now they're exploring collaboration as the industry landscape reshapes around AI and advanced manufacturing.
For Intel's struggling foundry division, landing AMD as a customer would be transformative. Industry analysts have long argued that Intel Foundry needs a major customer to validate its manufacturing capabilities and justify massive technology investments. AMD's endorsement would signal to other chip designers that Intel can handle complex, high-volume production.
The timing couldn't be more critical for Intel. CEO Lip-Bu Tan, who took the helm earlier this year, has been working to restore confidence in the company's manufacturing prowess. Intel shares have surged nearly 77% in 2025 as investors bet on his turnaround strategy, but the foundry business remains a key uncertainty.
Recent weeks have brought a parade of high-profile investors backing Intel's revival. The U.S. government took an equity stake as part of CHIPS Act incentives, while Nvidia made a strategic investment and SoftBank committed $2 billion. These moves were seen as votes of confidence in Intel's manufacturing capabilities, though notably, Nvidia hasn't committed to actually using Intel's foundry services.
