On October 1st, Eastern Time, Intel’s stock price surged by nearly 7% during trading after rumors circulated that the company was negotiating a foundry partnership with long-time rival AMD. Sources indicate that the two companies are discussing the possibility of AMD manufacturing some of its chips in Intel’s factories. While the negotiations are still in the early stages and the outcome is uncertain, an agreement would make AMD one of the most significant new customers for Intel Foundry Services (IFS).
AMD currently relies primarily on TSMC for producing its high-performance chips. Intel, meanwhile, has been aggressively promoting its foundry business in recent years, aiming to attract major clients to support its factory expansion and manufacturing technology investments. The rumor triggered a strong reaction from investors, with Intel’s stock closing the day up 7.1%, and AMD’s stock gaining over 1.3%. Both Intel and AMD declined to comment on the reports, with an AMD spokesperson stating they “do not comment on rumors or speculation.”
Intel’s foundry business is at a critical juncture. In recent weeks, the company has secured major capital injections and potential collaborations:
- SoftBank announced a $2 billion investment in August.
- The U.S. government, under President Trump, acquired a 10% stake in Intel through an $11+ billion investment.
- NVIDIA confirmed a $5 billion investment in Intel to co-develop PC and data center chips.
- Reports surfaced that Intel was also in talks with Apple about investment and collaboration.
These moves highlight Intel’s strategy to leverage partnerships and capital to fuel the growth of its foundry business and strengthen its position in domestic chip manufacturing.
If AMD ultimately partners with Intel, it would be a landmark agreement. The two companies are direct competitors in the x86 processor and server markets, so AMD entrusting part of its manufacturing to Intel would signal confidence in Intel’s production capabilities while aligning with the U.S. government’s push to boost domestic chip production. Earlier this year, AMD faced export restrictions in China; choosing a U.S.-based foundry partner could help the company maintain stronger ties with the White House and diversify its supply chain.
Analysts note that gaining a client like AMD would bolster Intel’s credibility in its foundry strategy and showcase its ability to handle complex chip manufacturing. However, Intel’s current process technology still trails TSMC’s, making it unlikely that AMD would shift its most advanced, high-margin products immediately. A partnership would likely begin with lower-complexity chips before scaling.
Amid the Trump administration’s “Made in America” push, new regulations are reportedly under discussion that would require chipmakers to maintain a 1:1 ratio between U.S. production and imports, or face tariffs. This environment strengthens Intel’s appeal as a foundry partner. For Intel, winning AMD as a customer would be a major milestone in revitalizing its foundry operations; for AMD, diversifying production and reducing geopolitical risk could prove strategically invaluable.