AMD Shares Jump on Talk of Intel Partnership in Chipmaking Shift

Advanced Micro Devices (AMD, Financials) went up after news that it would give some of its chip output to Intel (INTC, Financials), a company that has been a competitor for a long time.

Semafor says that the two companies are in the early stages of talking about making AMD a customer of Intel's foundry business. If it happens, it would be a rare example of bitter competitors in the x86 processor market working together.

For AMD, the change would imply that it wouldn't have to rely on Taiwan Semiconductor Manufacturing as much, which is its main production partner. Analysts noted that moving some production to the U.S. would also help the firm protect itself from tariffs and problems with its supply chain, which became more important after COVID-19 lockdowns in other countries.

Intel, on the other hand, has been working hard to get big-name clients as CEO Lip-Bu Tan rebuilds the company's manufacturing division. Getting AMD would be a symbolic gain because it would show that even AMD's closest competitor trusts Intel's manufacturing.

AMD stock rose 2.8% after the news, adding to a nearly 40% rise this year due to solid PC sales and demand for AI-related products. Intel also went up a little.