Intel and GlobalFoundries could benefit from potential semiconductor-industry restrictions on China and Taiwan
Intel’s stock is among the S&P 500’s biggest gainers early on Wednesday.
As the semiconductor sector heads for its worst day in almost two years, there are a couple of notable outliers.
Only five members of the PHLX Semiconductor Index are in positive territory early Wednesday, and two of those are making sizable moves higher. GlobalFoundries Inc. shares are ahead more than 13%, while Intel Corp. shares are up about 5% and are among the S&P 500’s largest gainers early in the session.
Pain elsewhere in the semiconductor sector could mean gains for GlobalFoundries and Intel, investors reason. That’s as other chip stocks are weighed down by the prospect of increased export restrictions on advanced semiconductor technology, as discussed in a recent Bloomberg News report, and by Donald Trump’s latest comments on Taiwan.
Taiwan “did take about 100% of our chip business” and “should pay us for defense,” Trump said in a Bloomberg Businessweek interview published Tuesday. The story noted that Taiwan makes more than 90% of advanced chips, according to data from the Semiconductor Industry Association.
GlobalFoundries, a semiconductor-manufacturing company based in Malta, N.Y., stands to benefit from restrictions on chip making abroad. Intel also makes its own chips and is building out a manufacturing business to make semiconductors for other companies. Both received awards as part of the Chips Act, a Biden administration program to help prop up chip companies that have domestic manufacturing operations.
Mizuho desk-based analyst Jordan Klein wrote Wednesday that he would watch Intel and Texas Instruments Inc. “as potential US domestic semi ‘winners’ if US further restricts China in semis,” although he said he wouldn’t necessarily be an Intel buyer. He also flagged that Micron Technology Inc. is largely based in the U.S., though its shares are getting dragged lower by about 5% alongside the broader sector action.
The PHLX Semiconductor Index is off 4.4% in morning action and on track to record its largest single-day percentage decline since it fell 4.5% on Oct. 14, 2022.