Intel’s comeback story is even wilder than it seems: Stock up 490%, but chip yields still lag

Intel’s stock has surged an astonishing 490% over the past year, making it one of the most dramatic turnarounds in Silicon Valley history. But beneath the Wall Street euphoria lies a more complicated reality: the company’s core chip manufacturing yields still trail industry leader TSMC, and employees report that CEO Lip-Bu Tan has been light on specifics about how he plans to close the gap.

Tan’s first year: Schmoozing over restructuring

Lip-Bu Tan took the helm at Intel in March 2025, inheriting a company that had lost its manufacturing edge and was bleeding market share. Rather than immediately slashing costs or announcing a major restructuring, Tan spent much of his first year building relationships. He secured a sweetheart deal with the U.S. government, which is now Intel’s third-largest shareholder. He also reportedly forged a factory partnership with Elon Musk and landed preliminary manufacturing agreements with both Apple and Tesla.

These moves have fueled investor confidence, but some employees tell Bloomberg that Tan has been vague on internal execution plans. Teams have reportedly adjusted missed deadlines rather than recovering from them, raising questions about whether the company’s operational issues are being addressed or simply papered over.

The yield problem remains

Intel’s chip yields — the percentage of usable chips from each silicon wafer — still lag significantly behind TSMC, the Taiwanese semiconductor giant that manufactures chips for Apple, Nvidia, and AMD. Closing that gap is critical to Intel’s turnaround, but it requires years of investment in new fabrication processes and equipment. Tan has committed to building new fabs in the U.S., but the timeline for achieving parity with TSMC remains uncertain.

Why the stock is soaring anyway

Wall Street is betting that Tan’s deal-making and government support will eventually translate into operational improvements. The U.S. government’s stake in Intel provides a financial backstop, while partnerships with Apple and Tesla could secure high-volume customers for Intel’s foundry services. Investors appear to be pricing in a future where Intel becomes a viable alternative to TSMC for Western chipmakers seeking supply chain diversification.

Conclusion

Intel’s comeback story is real in market terms, but it remains a work in progress. The stock’s 490% rise reflects a bet on Tan’s strategy and the geopolitical tailwinds favoring domestic chip production. Whether the company can execute on its manufacturing promises will determine if that bet pays off — or if the stock has simply run ahead of reality.

FAQs

Q1: Why has Intel’s stock risen 490% in a year?
Investors are betting on CEO Lip-Bu Tan’s turnaround strategy, which includes government support, partnerships with Apple and Tesla, and a focus on U.S. chip manufacturing. The stock reflects optimism about Intel’s future as a foundry player, even though current fundamentals remain weak.

Q2: How does Intel’s chip manufacturing compare to TSMC?
Intel’s chip yields still lag behind TSMC, which is the world’s most advanced semiconductor manufacturer. Closing this gap requires significant investment in new fabrication processes and equipment, and analysts expect it will take several years.

Q3: What role has the U.S. government played in Intel’s turnaround?
The U.S. government has become Intel’s third-largest shareholder through a sweetheart deal that provides financial support for domestic chip production. This aligns with broader national efforts to reduce reliance on Asian semiconductor manufacturing.