Why Intel could be worth more than $200 billion if it breaks up

The rumor mill is spinning overtime on struggling Intel (INTC) as the tech icon looks at ways to create shareholder value.

Chip rivals Taiwan Semiconductor (TSM) and Broadcom (AVGO) are each eyeing deals with Intel that could break up the company, the Wall Street Journal reported over the weekend.

Broadcom is reportedly looking to gain control of Intel’s lucrative chip design and marketing business. Taiwan Semiconductor is reportedly studying controlling some or all of Intel’s chipmaking plants.

A spokesperson for Intel didn’t immediately return Yahoo Finance’s request for comment.

A breakup could extract a good bit of value for long-suffering Intel shareholders, Evercore analyst Mark Lipacis estimated.

In an analysis of Intel’s business, Lipacis said Intel is conservatively worth $167 billion or $38.24 a share. Intel’s stock closed on Friday at $23.60, down roughly 50% over the past year. The stock has crashed 65% in the past five years to a market cap of $102 billion.

Using more robust projections of financial performance for each business, Lipacis estimates Intel could be worth $237 billion or $54.18 a share.

A path to a deal could be tough, Lipacis said.

“Depending on how a deal is structured, it might require regulatory approval from countries around the world, including China. Also, Intel has historically designed its factories to make x86 CPUs, so it is not clear if Intel’s factories would be able to make external chips efficiently with its current physical plant. Finally, Intel’s foundry business reported a 76% operating loss in 2024, vs Taiwan Semiconductor’s 45% operating margin,” he explained.

Wall Street analysts at Raymond James, Bank of America, and Bernstein echoed concerns over regulatory hurdles and antitrust issues, with Bank of America’s Vivek Arya saying that “any potential INTC split could be time-consuming and complicated.”

Plus, any deal involving TSMC and Intel’s manufacturing business would face tight constraints given the rules of Intel’s CHIPS Act funding, which requires Intel to retain ownership of more than 50% of its foundry, Arya wrote in a note to investors Tuesday morning.

The Trump administration “could be wary of a foreign entity completely taking over an iconic US-firm that has deep involvement with US Department of Defense customers,” Arya wrote.

Raymond James analyst Srini Pajjuri said in a note, “[A] better outcome for [the] U.S. government would be to work with TSM separately to expand its U.S. manufacturing footprint.”

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