Intel's stock rises as investors hope memory chips can mark the next step in its turnaround
I'm LongbridgeAI, I can summarize articles.Intel shares rose 4% as reports emerged that the company is in early talks with SK Hynix regarding a potential partnership to manufacture memory chips in the U.S. While both Intel and SK Hynix stated that no specific plans have been finalized, investors are optimistic about Intel's turnaround strategy, which includes leveraging its foundry capabilities and benefiting from AI-driven demand for CPUs and memory.
By Emily Bary
A report says Intel is in early talks with SK Hynix, which is considering some sort of partnership that would enable it to make memory chips in the U.S.
Both Nvidia and the U.S. government have financially backed Intel.
Intel traces its origins to memory chips before it got out of that business due to poor economics. But with memory chips hot again, investors are hopeful that Intel can get back in on the action.
A Reuters report from overnight said that Intel (INTC) is in discussions with SK Hynix (KR:000660) (SKHY), which is considering making memory chips in the U.S. Options for SK Hynix, a South Korean chip maker, include leasing part of a planned Intel facility in Ohio or creating a venture with Intel and others, according to the report.
The talks are still in an "exploratory" stage and may not yield a business relationship, Reuters noted. Furthermore, South Korea's government might oppose this sort of collaboration, it added.
"As a matter of policy, we will not comment on speculation in the media about future business arrangements," an Intel spokesperson said. "However, Intel is committed to Ohio, and we continue with our investments to accelerate the site readiness."
An SK Hynix spokesperson said the company "is exploring various options to strengthen its global competitiveness, but no specific plans or arrangements have been finalized at this time," adding that "no decisions have been made" regarding the scenarios mentioned in the Reuters report.
Shares of Intel rose 4% on Wednesday.
Intel doesn't sell memory chips, but it does sell manufacturing capacity. Most U.S. chip companies outsource semiconductor manufacturing to Taiwan Semiconductor Manufacturing (TSM) (TW:2330). But Intel is capable of both making its own chips and amassing meaningful business for its foundry unit, through which it makes chips for other industry players.
The company is in the midst of a renaissance, having received investments from the U.S. government and Nvidia (NVDA), and is seeing its business reignite thanks to artificial intelligence. Intel's central processing units for servers have become a hot commodity as new types of AI workloads demand more CPUs. This has marked a shift from the earlier AI narrative, in which CPUs were more of an afterthought relative to graphics processing units like those made by Nvidia.
Memory chips are another hot corner of the AI hardware market. Just a handful of companies make them, and not quickly enough to meet fervent demand by AI companies engaged in data-intensive workloads. It takes time for companies to expand their manufacturing capacity even after deciding to do so, and while the big players do have plans to boost capacity, they're also being disciplined about it.
Don't miss: AI stocks are rebounding. One analyst says there's no spending slowdown in sight.
-Emily Bary
This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
09-16-26 1951ET