Intel (INTC) Stock Soars as Company Ditches Cars for Chips

TLDR

Table of Contents

Intel stock surged 6.4% following a foundry market report showing the company holding second place with 6.5% market share
The chip maker is shutting down its automotive division despite serving 50 million vehicles with Intel processors
Samsung reportedly shifting focus from 1.4nm to improve 2nm yields, potentially benefiting Intel’s competitive position
Geopolitical developments including Israel-Iran ceasefire and Fed rate cut signals boosted broader chip sector
Intel’s 18A manufacturing process showing progress according to Counterpoint Research data

Intel stock jumped 6.4% on Tuesday as investors digested mixed news from the semiconductor giant. The rally came on the back of a foundry market report and broader market optimism.

Counterpoint Research released new data on the chip fabrication industry that painted a cautiously positive picture for Intel. The company maintained its second-place position in the Foundry 2.0 category with a 6.5% market share in the first quarter.

While this represents a slight decline from the 6.8% share Intel held in the same period last year, it marks an improvement from the 5.9% recorded in the fourth quarter of 2024. Taiwan Semiconductor Manufacturing continues to dominate with a 35.3% market share.

The report highlighted progress in Intel’s 18A manufacturing process. This technology is central to Intel’s strategy of competing with TSMC for third-party chip fabrication contracts.

Success in attracting external customers depends heavily on whether Intel can deliver competitive chip yields from its 18A process. Early indicators suggest the company is making headway in this critical area.

Adding to the positive sentiment, Samsung is reportedly pulling back from its 1.4nm process development. The South Korean company is instead focusing resources on improving yields from its 2nm technology.

This shift could reduce competitive pressure on Intel as it works to establish itself as a credible alternative to TSMC for advanced chip manufacturing.

Cost-Cutting Continues with Automotive Exit

Intel announced plans to close its automotive division as part of ongoing efforts to streamline operations. The move affects a business that currently serves around 50 million vehicles with Intel processors.

⚠️ Major layoffs ahead for #Intel? Following rumors of cuts affecting up to 20% of its manufacturing staff, layoffs are expected to begin on July 15. Team Blue is also reportedly set to shut down its automotive unit soon.💡More: https://t.co/EP0YELv3Xh 🔗 pic.twitter.com/sNDkDaJaWG
— TrendForce (@trendforce) June 25, 2025

The company stated it will fulfill existing commitments before winding down the division. Most employees in the automotive group will face layoffs once the transition is complete.

This closure fits Intel’s broader strategy of narrowing its focus to data center and core client operations. The company has been systematically shutting down smaller divisions to improve financial performance.

Interestingly, Intel’s majority stake in Mobileye will remain unaffected by the automotive division closure. The autonomous driving technology company operates as a separate entity despite its clear automotive connections.

Market Dynamics Boost Chip Sector

External factors also contributed to Tuesday’s stock gains. The announcement of a ceasefire between Israel and Iran helped lift the broader market as investors saw reduced geopolitical risk.

Federal Reserve Chair Jerome Powell’s comments about a possible July interest rate cut added another layer of optimism. The more dovish stance from the Fed particularly benefits growth stocks like Intel.

The S&P 500 rose 1.2% while the Nasdaq Composite gained 1.5% on Tuesday. Intel’s outperformance reflected the combination of company-specific news and favorable market conditions.

A separate report emerged suggesting Intel processor users could see 20% performance gains by disabling certain graphics security mitigations. However, this comes with unknown security risks that may deter widespread adoption.

Wall Street analysts maintain a Hold rating on Intel stock with an average price target of $21.30. This implies potential downside of 5.75% from current levels following the stock’s 31% decline over the past year.

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