Remember how we have been talking about the recent claims of potential trade secret theft between chip stock Intel (INTC) and TSMC (TSM), specifically over Intel hiring former executive Wei-Jen Lo? New reports suggest that the poaching might go deeper, and might actually go in two different directions, of a sort. But little of this mattered to shareholders, as they sent Intel shares jumping up over 3% in Wednesday afternoon’s trading.
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Reports suggest that Intel has been looking for new workers already employed with TSMC, turning to the Arizona fab to find their prey. The reports also suggest that Intel is offering those employees salaries that are about 20% to 30% higher than they are seeing with TSMC, as well as a workload that is only about half as heavy.
With Intel and TSMC both producing chips in Arizona, this makes things that much more significant. It also makes things a little stranger; while there might have been something to Intel allegedly poaching Lo—though admittedly this will be a bit of a challenge since most of the laws are not specifically written in the United States; consult an attorney for further qualifications—the idea of Intel poaching workers in the United States is somewhat more commonplace, assuming various contracts do not get involved.
Power Poaching
And that was when things got strange, and perhaps karmic in nature. Reports emerged noting that Meta Platforms (META) was interested in getting power from a substation in Ohio. Yes, in New Albany, Ohio. Yes, one of the substations that was built for the Intel plant that was going in, but seems to be at the very least on hold right now.
Meta—rather, an “affiliate” of Meta, reports note—was out for a three-year agreement with AEP Ohio to connect and draw power from the Green Chapel substation, which was originally meant to supply Intel with power. The plants were originally set to start producing in 2030 and 2031, which means that a three-year agreement would likely proceed seamlessly anyway. Throw in the fact that Intel’s current construction schedule represents a loss to AEP Ohio, and the chances of that deal going through increase somewhat.
Is Intel a Buy, Hold or Sell?
Turning to Wall Street, analysts have a Hold consensus rating on INTC stock based on three Buys, 25 Holds and six Sells assigned in the past three months, as indicated by the graphic below. After a 51.5% rally in its share price over the past year, the average INTC price target of $36.07 per share implies 2.51% downside risk.
