Consider whether abandoning Intel for these two technology stocks could be a wise choice.
TSMC, the world's largest contract chipmaker, has reported impressive financial results in Q2 2025, with a 44.4% revenue growth and earnings per share up 60.1%. The Taiwanese company, which manufactures advanced chips for tech giants like Apple and Nvidia, has solidified its leadership position in the foundry business, particularly benefiting from AI-driven demand and advanced process nodes like 3nm being at full capacity.
Advanced Micro Devices (AMD) is another key player in the semiconductor market. While AMD does not manufacture chips itself, its reliance on TSMC’s advanced foundry services and its competitive CPU and GPU products place it as a growth beneficiary in AI and semiconductor markets. AMD's revenue in the first quarter rose 36% to $7.44 billion, driven by its success in both the data center and the client segment.
Intel, on the other hand, is undergoing a strategic turnaround focused on foundry investments and new process nodes like its promising 18A node. However, the company has lost some manufacturing edge and still faces challenges in execution and market share losses to TSMC. Despite a recent revenue beat in Q2 2025 ($12.9 billion), analysts remain uncertain about Intel’s foundry execution and ability to win clients from TSMC, reflecting in a wide range of price targets and a cautious investment stance.
Looking ahead, TSMC is expected to maintain market dominance, driven by continuous innovations in process nodes and strong relationships with major tech firms. Its exemption from US tariffs in August 2025 further strengthens its competitive position and growth outlook by easing trade barriers. AMD, meanwhile, is poised to capitalise on increased AI demand with TSMC’s foundry support. Its competitive product lineup in CPUs and GPUs for AI and gaming continues to fuel growth, aligning well with global AI trends.
Intel's future prospects hinge heavily on successful execution of its next-generation 18A node and on establishing a viable foundry business. This requires significant investment and operational excellence. Intel’s strategic pivot is promising but remains uncertain, with mixed analyst views and current stock technical trends showing weakness but some room for recovery.
In summary, TSMC currently outperforms both AMD and Intel in semiconductor manufacturing and foundry sectors, supported by robust AI-related growth. AMD benefits from this ecosystem with competitive chip designs, while Intel aims to regain ground through aggressive foundry investments and technology development but faces significant execution risks and skepticism.
Sources:
[1] CNBC, 2025, TSMC reports record-breaking Q2 earnings, citing strong demand for 5G and AI chips
[2] Reuters, 2025, Intel to spin off networking and edge business, focus on AI and foundry
[3] Bloomberg, 2025, AMD's AI Acquisitions and TSMC Partnership Boost Growth
[4] The Wall Street Journal, 2025, Intel's Foundry Struggles: Can the Company Regain Market Share from TSMC?
[5] CNBC, 2025, TSMC Exempted from US Tariffs, Boosting Growth Prospects
Investing in TSMC, the world's largest contract chipmaker, could yield high returns due to its strong financial performance and market dominance, particularly as it continues to innovate and solidify its relationships with tech giants.
Finance analysts consider AMD a growth beneficiary in the AI and semiconductor markets, given its competitive product lineup and reliance on TSMC’s advanced foundry services.
Money placed in the semiconductor industry, specifically Intel, may face execution risks due to the company's strategic pivot to foundry investments and technology development, as it aims to regain ground lost to TSMC.
