Intel May Be Next in Line for a Targeted Trade Deal. Should You Buy INTC Now?

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Semiconductor Trade Deals Stir Controversy

The U.S.-China trade landscape has been a high-stakes chessboard, with semiconductor giants Nvidia (NASDAQ:NVDA) and Advanced Micro Devices (NASDAQ:AMD) recently securing controversial export licenses to sell chips in China. 

These deals, however, come with a catch: both companies reportedly agreed to forfeit 15% of their China chip sales revenue to obtain these licenses, raising questions about their legality and long-term implications. 

Critics argue the arrangements skirt U.S. export controls, which were tightened to curb China’s access to advanced technologies. Sentiment is mixed, with some praising the economic boost while others decry the concessions. 

Now, Intel (NASDAQ:INTC) appears poised for a similar company-specific trade deal, potentially unlocking significant revenue streams but also inviting scrutiny. As geopolitical tensions simmer, Intel’s next steps could reshape its market position and investor confidence.

Intel Next in Line?

On Truth Social, President Trump revealed he met with Intel CEO Lip-Bu Tan and Commerce Secretary Howard Lutnick, describing the meeting as “interesting” and Tan’s success as “an amazing story.” It was less than a week ago that Trump was calling for the CEO to resign, saying he had a “conflict of interest.”

Trump noted that Tan would meet with his cabinet the following week to “bring me suggestions,” sparking discussion that it would gain its own potential deal. This suggests Intel is actively exploring a tailored trade agreement, likely aimed at resuming or expanding chip sales to China. 

The administration’s focus on such deals reflects a broader strategy to balance economic gains with national security, as seen in recent trade negotiations with other nations.

Potential Benefits for Intel

Nvidia’s deal could recover $4.5 billion to $5.5 billion of the $23 billion in chip sales lost due to prior export bans, while AMD, which excluded China from its recent earnings guidance, could anticipate a significant revenue boost from its MI308 chips. 

Intel, has historically been a major player in China’s tech market. The country is its largest market, accounting for 29% of its 2024 revenue ($15.5 billion), primarily for data center and PC chips. According to Bernstein analysts earlier this year, China imports $10 billion worth of chips from the U.S. annually, 80% of which are central processing units (CPUs) assembled by Intel in the U.S. 

A trade deal could restore or expand these sales, potentially adding billions to Intel’s top line. Intel’s portfolio, including Xeon processors and AI accelerators like Gaudi 3, could target China’s growing demand for AI and cloud computing infrastructure.

Unlike Nvidia’s H20 or AMD’s MI308, Intel’s less-specialized chips might face fewer restrictions, offering a smoother path to market re-entry.

China’s Pushback on Nvidia and AMD

A wrinkle in the Nvidia and AMD deals emerged when Beijing issued a letter urging companies to avoid purchasing Nvidia’s H20 chips, signaling resistance to the U.S. firms’ re-entry into its market. While AMD’s MI308 chips weren’t explicitly mentioned, similar pressure is expected. 

This pushback could limit the upside of these deals, as Chinese firms may prioritize domestic alternatives amid escalating tensions. Intel, if granted a similar deal, might face comparable pressure, especially given China’s drive to bolster its domestic semiconductor industry.

Key Takeaways

Intel’s potential trade deal could unlock significant revenue, but it’s not without risks. While Nvidia and AMD face high-profile scrutiny due to their AI chip dominance, Intel’s broader product range — spanning CPUs and AI accelerators — may attract less attention, potentially allowing it to slip under China’s radar. 

However, Beijing’s push for self-reliance could still pressure customers to shun Intel’s chips. Investors must weigh these risks against the potential for a multi-billion-dollar sales boost. Intel’s lower profile compared to Nvidia and AMD might mitigate backlash, but geopolitical volatility and domestic competition in China remain hurdles. 

For now, INTC’s stock could see upside if a deal materializes, but caution is warranted given the complex trade landscape.

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