This article first appeared on GuruFocus.
Intel (NASDAQ:INTC) climbed nearly 8% early Thursday, despite news that Taiwanese authorities searched the home of its executive Wei-Jen Lo. Authorities are investigating whether Lo, formerly Taiwan Semiconductor (NYSE:TSM), may have taken sensitive technology related to advanced semiconductor processes.
Prosecutors seized computers and other materials during the raid. A court order also seized some of Low’s assets, including real estate, as part of the investigation. Taiwan Semiconductor (NYSE:TSM) has launched legal action, claiming Lo violated non-compete agreements and trade secret rules before leaving the company.
Lo joins Intel (NASDAQ:INTC) as vice president of research and development after retiring from Taiwan Semiconductor (NYSE:TSM) in July, where he held a senior role in corporate strategy and advanced node technology development.
Intel CEO Lip-Bu Tan rejected the allegations, telling Bloomberg they were speculation and emphasizing the company’s commitment to intellectual property rights.
The investigation comes as Intel (NASDAQ:INTC) revealed new risks related to its recent $11.1 billion US government stake, highlighting the company’s ongoing challenges in global semiconductor expansion.
On the positive side, analyst Ming-Chi Kuo said Apple (AAPL) is close to choosing Intel as a foundry partner, adding to optimism about Intel’s 18A process and future chip orders.
The report suggested that Apple has tested Intel’s design tools and is waiting for the next software release, raising investors’ hopes that Intel can secure a major foundry contract and strengthen its position in semiconductor manufacturing.
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