Intel's Foundry Unit Gains Momentum Amid Trump’s U.S. Chip Push, Mizuho Raises Price Target

Mizuho has raised its price target on Intel (NASDAQ: INTC) from $20 to $23, maintaining a Neutral rating, citing potential growth in its foundry unit due to the Trump administration's push to boost U.S. semiconductor production.

As the largest recipient of CHIPS Act funding, Intel could receive additional government support, particularly after former President Donald Trump pledged to expand artificial intelligence chip manufacturing domestically.

Recent reports indicate that Taiwan’s TSMC and Broadcom (NASDAQ: AVGO) are considering separate deals involving Intel’s foundry business. However, Mizuho analysts suggest a TSMC acquisition is unlikely, as U.S. regulators would be hesitant to allow a foreign company to control domestic chipmaking assets. Additionally, TSMC aims to maintain its leadership in advanced semiconductor manufacturing rather than collaborate with Intel.

Broadcom appears to be a more plausible buyer, according to Mizuho, though any acquisition would likely involve significant debt and equity financing. The analysts argue that Intel’s industry leadership, discounted valuation, and potential for streamlining operations could outweigh these challenges.

Despite this optimism, Intel faces hurdles, including leadership instability following the departure of former CEO Pat Gelsinger, loss of market share in server and AI-driven PCs, and difficulties capitalizing on AI advancements. The company’s transition to a foundry model could further pressure its performance in the coming year.

Mizuho’s revised outlook underscores the shifting dynamics in the U.S. semiconductor industry, where Intel seeks to regain its competitive edge amid increased government backing and ongoing industry consolidation.