Intel’s stock managed to defy the broader sell-off in the tech sector on Thursday, closing the daily session with a 1.2% gain, according to data from S&P Global Market Intelligence. Despite the worst single-day valuation slide for the semiconductor industry in over four years, Intel’s shares had surged as much as 5.3% earlier in the trading session.
The semiconductor market experienced significant turmoil due to a series of concerning developments. Bloomberg reported that former president and current presidential candidate Donald Trump made comments suggesting a potential reluctance to defend Taiwan or require it to pay for services if he were to assume the role of Commander-in-Chief again. Taiwan is home to Taiwan Semiconductor Manufacturing, the world’s leading contract semiconductor fabrication company, which plays a crucial role in national security and economic applications by manufacturing advanced chips used for artificial intelligence (AI) and accelerated computing.
Additionally, Bloomberg reported that the Biden administration was contemplating stronger export restrictions for chip and semiconductor equipment manufacturing companies dealing with the Chinese market. While measures are already in place to prevent companies like Nvidia, AMD, and Intel from exporting their most advanced chips and processors to China, the proposed foreign direct product rule would enable the U.S. to impose more extensive restrictions by targeting products manufactured in other countries that utilize U.S.-derived technology.
Despite these challenges, Intel’s expanding chip fabrication business provided a glimmer of hope. As tensions between China and Taiwan raised concerns about future chip availability, countries like the U.S. and its Western allies have been investing billions of dollars in enhancing their domestic fabrication capabilities. Intel has already received significant funding and is likely to receive further capital support from the public sector. The geopolitical risks associated with the situation could further accelerate the growth of Intel’s fab business. Currently ranked as the world’s third-largest chip fabrication company, Intel aims to become the second-largest player in the space by 2030, with a strong focus on providing third-party fab services.