0402 | A single-day surge of nearly 9%! Intel invests $14.2 billion to regain control of its wafer f

This article is from"Real-World Practice in the Options Boom"This column aims to position itself at the forefront of investment trends, dissecting the opportunities they present and teaching readers how to leverage options to capitalize on them.

*The following content is for educational purposes only, does not constitute investment advice, and is subject to time sensitivity; data are current as of the close of U.S. markets on April 2, 2026. Please exercise caution in evaluating its accuracy.

Yesterday (April 1),$Intel(INTC.US)$and$Advanced Micro Devices(AMD.US)$Both outperformed the broader market. Intel closed up 8.84%, while AMD rose 3.33%.$SPDR S&P 500 ETF(SPY.US)$Only a 0.75% increase,$iShares Semiconductor ETF(SOXX.US)$Up 3.01%.

Although AMD outperformed the broader market, Intel's rally was even more pronounced. This cannot be attributed solely to the overall market and sector gains; rather, it stems from stock-specific factors that have led the market to assign it a higher valuation.

What exactly happened? Let's take a look below.

Why has Intel suddenly surged? Let's clarify three things.

$Intel(INTC.US)$The sharp rise in the stock price is primarily attributable to a catalyst event specific to the company.

The deal is that Intel spent US$14.2 billion to buy back a 49% stake in the "Irish Fab 34" held by Apollo. Since then, all the revenue from this fab has belonged to Intel alone.

Many people may ask: Why can a wafer fab's share repurchase cause the stock price to soar? Let's first clarify three core questions: What is Fab 34, why does Apollo hold its equity, and why does Intel spend a fortune to buy it back.

First of all, Fab 34 is no ordinary facility—it is one of Intel's most important advanced fabs in Europe, dedicated to producing high-volume advanced chips such as Intel 4 and Intel 3, including Core Ultra processors and Xeon 6 server CPUs. Moreover, it is Intel's first high-volume fab in Europe to use EUV (extreme ultraviolet) technology, making it crucial for Intel's capacity supply.

As for why Apollo holds equity: Back in 2024, Intel launched the Semiconductor Co-Investment Program (SCIP), under which Apollo invested about US$11 billion in Intel in exchange for a 49% stake in this wafer fab. However, it's important to note that despite holding shares, Intel remains solely responsible for the operation and management of the fab; Apollo only holds the right to the fab's output and then sells the manufactured chips back to Intel.

The core reason why Intel wants to buy back the equity is to regain all the profits—previously, 49% of the profits from this wafer fab had to be shared with Apollo; now that it has been bought back, all the profits belong to Intel, and Intel can also have more autonomy in controlling production capacity to address the shortage of CPU supply.

What impact does the buyback have on Intel?

$Intel(INTC.US)$The company has also made it clear that this share repurchase is not a loss-making deal: starting in 2027, the fab will consistently boost the company's earnings per share and strengthen its financial position.

According to Intel's 2025 earnings report, the SCIP project in Ireland alone generated $268 million in revenue for the company (a portion of which did not originally belong entirely to Intel). Intel forecasts that as the Fab 34 wafer fab in Ireland is gradually completed, the project's profits will continue to grow in 2026 and surge significantly in 2027.

When Intel buys back its shares, it is essentially repurchasing the portion of profits that would have been distributed to other shareholders and retaining them for itself. Since the project is expected to become increasingly profitable in the future, buying back the shares now allows Intel to capture the entire, growing share of profits going forward.

This transaction is widely viewed by the market as a positive signal.

On the one hand, this sends a signal that the company's financial position is becoming more stable. In 2024, when it sold the stake, Intel was under tremendous capital expenditure pressure. The fact that it now has the capacity to conduct share repurchases indicates that its balance sheet has been strengthened and its financial discipline has improved.

According to the latest financial report, the company's free cash flow (FCF) for the fourth quarter of 2025 surged 129.97% year on year to US$800 million, while operating cash flow also remained robust, providing solid support for such capital initiatives.

On the other hand, this also reflects management's confidence in its business strategy and future prospects, particularly its strategic positioning in the AI chip manufacturing sector.

Intel has shifted from merely surviving by divesting equity in 2024 to now pursuing expansion. Its IDM 2.0 strategy has entered a substantive phase of deepening, reemphasizing the long-term value of integrated design and manufacturing.

From an industry perspective, what key signals are being conveyed?

$Intel(INTC.US)$Spending heavily—both financially and in terms of resources—to regain control of Fab 34 is not only a pivotal step in advancing its IDM 2.0 strategy; it also sends a clear signal to the global semiconductor industry:

In the AI-driven era of computing power, control over advanced manufacturing capacity has itself become a core strategic asset and a critical competitive barrier. Coupled with the current severe CPU supply shortage, this is reshaping the logic of industrial competition and compelling key industry players to reassess and recalibrate their respective strategies.

Reuters reported in February that both Intel and AMD have informed their Chinese customers that server CPU supplies are extremely tight and that there is no stock. Specifically, the delivery time for some Intel products can be as long as six months, while some AMD products require eight to ten weeks; moreover, Intel's server CPUs have already seen price increases of more than 10% in the Chinese market.

As early as January this year, Intel stated at its earnings conference that there was a shortage of CPU supply and that inventory was expected to hit a low in the first quarter of this year before gradually improving.

As large AI models transition from training to large-scale deployment, the demand for inference workloads has surged, and the importance of CPUs in handling complex logic, data scheduling, and the management of AI agents has skyrocketed.

In the past, CPUs were viewed as mere ordinary components in AI systems—nothing particularly special. But now it's finally clear that CPUs have become the bottleneck in AI infrastructure: as AI systems grow larger and run for longer periods, their demand for CPU resources continues to rise, while supply struggles to keep pace, leading to increasing CPU scarcity.

Intel has spared no expense in reclaiming Fab 34, precisely to bet on and control the production capacity and technological pace of this CPU revival.

From a broader perspective, Intel's move reflects a fundamental shift in the semiconductor industry: from prioritizing efficiency to prioritizing control.

Over the past several decades, the semiconductor industry has operated under a logic of specialized division of labor, separating design from manufacturing in pursuit of optimal efficiency and cost. However, in today's AI-driven super-cycle of surging demand, supply-chain certainty and controllability have come to outweigh mere cost considerations. The widespread tightness in production capacity has given companies with in-house manufacturing capabilities greater autonomy and influence over capacity allocation, the pace of technological iteration, and supply security.

Intel's IDM 2.0 strategy is precisely a bet on the establishment of this rule. By regaining control over manufacturing, Intel positions itself as a comprehensive solution provider that offers both products and production capacity—this is a very powerful trump card in the current industrial environment.

What do other core players think? Let's keep it brief.

$Advanced Micro Devices(AMD.US)$: It is the direct beneficiary of the CPU shortage, with strong performance; in the fourth quarter of 2025, its revenue, data center revenue, and earnings per share all significantly exceeded expectations. However, its biggest weakness is also clear—being a fabless company, it relies entirely on Taiwan Semiconductor for all advanced-process capacity. When AI chips are frantically vying for capacity, AMD's CPU shipment pace essentially depends on how much of the pie it can secure from Taiwan Semiconductor. Bank of America believes that with the launch of the MI400X product and the realization of its collaboration with OpenAI, the second half of 2026 will mark a major inflection point for AMD's growth, with earnings per share expected to more than double. The opportunities are substantial, but supply-chain risks are equally significant.

$NVIDIA(NVDA.US)$: NVIDIA's profitability is beyond doubt, with its moat stemming from its full-stack ecosystem—ranging from GPUs to networking to CUDA software—which creates extremely high switching costs. However, it also relies on Taiwan Semiconductor's advanced packaging capacity. That said, NVIDIA is no longer content to simply be the king of GPUs; its Grace and Vera server CPUs based on the Arm architecture directly target the market dominated by Intel and AMD. Moreover, NVIDIA has invested in Intel's foundry business, which is essentially a strategic move to diversify supply-chain risks.

$Taiwan Semiconductor(TSM.US)$: Under the near-monopoly of advanced processes, Taiwan Semiconductor's role has evolved from a mere manufacturing service provider to a hub for allocating resources in the global computing power race. Most of its capital expenditures are directed toward advanced logic processes and fab construction, with capacity already booked through 2028. Who can secure Taiwan Semiconductor's capacity and how much they can secure directly determines the product launch schedule and market competitiveness.

$Arm Holdings(ARM.US)$: An invisible giant in the CPU architecture field, its ARM architecture is widely used in mobile phones and IoT devices. In recent years, it has begun a strategic transformation, shifting from traditional IP licensing to directly designing and selling data center CPUs, entering the AI inference market and attempting to move from behind the scenes to the forefront in the CPU field. However, the risk lies in the fact that when it starts competing directly with its licensees (such as NVIDIA), it may shake the very foundation of the ecosystem on which it relies for survival.

How to Combine Options Strategies? Understand with Three Examples

Having reviewed the fundamentals, the next step is to consider: if you agree with the overarching narrative of CPU shortages and capacity constraints, what other ways are there to gain exposure besides buying stocks? Below, we'll break down the corresponding options strategies by category.

For AMD, NVIDIA, and Arm, which have long-term logic but limited production capacity

They are all fabless companies that rely on Taiwan Semiconductor for advanced processes. Their performance features high growth, but risks such as sudden capacity squeeze and valuation correction need to be hedged.

If you are bullish on the long-term trend but concerned about excessive short-term volatility, consider a protective put strategy: hold the underlying stock while simultaneously purchasing an out-of-the-money put option (e.g., with a strike price 5%–10% below the current market price).

The premium functions like an insurance premium: if the stock price rises, the only loss is this small cost; but if supply-chain disruptions or a market correction cause a sharp drop in the stock price, the profit from the put option can partially offset the stock's losses, thereby capping downside risk.

The expiration-date profit-and-loss profile of this strategy is illustrated in the following chart (which covers only the options component and excludes the underlying stock), and is provided solely for educational purposes and does not constitute investment advice:

For Intel and Taiwan Semiconductor, which are vying to regain control of production capacity

Both have either already established or are in the process of strengthening their internal manufacturing capabilities; however, the degree of certainty surrounding each remains significantly different.

Intel's transformation story is promising, but its financial condition and order outlook remain problematic. The stock price may surge or trade sideways, but at present the probability of a steady rise may be higher than that of a sharp jump.

If you are bullish on a stock's long-term price but do not want to bear the high cost of buying a plain call option, or if you believe that the stock price has already priced in some positive news in the short term and there is limited room for a sharp rally, you may consider a bull call spread—a bullish straddle strategy using call options. Specifically, you would buy a at-the-money or slightly out-of-the-money call option while simultaneously selling the same number of call options with a higher strike price (e.g., 10–15% higher).

This strategy reduces the premium cost of the call option, with maximum profit capped at the difference between the two strike prices, making it suitable for markets expected to rise steadily but not surge. Should the stock price plunge for any reason, losses are limited to the net premium received, keeping risk manageable.

The expiration-day P&L profile of this strategy is shown in the chart below; it is provided for educational purposes only and does not constitute investment advice.

As for Taiwan Semiconductor, which has a relatively stable fundamental and dominates in advanced processes, its stock price fluctuates relatively less and is already at a relatively high level. If you are optimistic about the long term but have a low willingness to buy at the current price and are willing to accumulate on dips, the Cash-Secured Put strategy may be suitable.

In other words, sell put options at a strike price that is 8% to 12% below the current market price, while keeping sufficient cash on hand to buy the underlying stock if the option is exercised. If the stock price does not fall below the strike price by expiration, you will reliably collect the premium; if it does, you will be obligated to purchase the stock at a discounted price, resulting in an effective cost basis that is lower than the prevailing market price at the time.

The expiration-day P&L profile of this strategy is shown in the chart below; it is provided for educational purposes only and does not constitute investment advice.

If you’d like to gain more insights into options strategies, you can easily access them on the mobile app or the new desktop platform by following these steps!

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