Wells Fargo & Company warns of the risk of market loss in China and gives Intel Corporation (INTC.US) a "hold" rating.

The chip war between China and the US has caused a stir once again. The latest report from Wells Fargo & Company points out that Intel Corporation's (INTC.US) local expansion strategy may pose hidden risks - chips produced in the US may face retaliatory tariffs as high as 84% from China, while competitors such as Qualcomm (QCOM.US) and AMD (AMD.US) that use Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR (TSM.US) for production may be exempt. In response to this, Wells Fargo & Company has given Intel Corporation a "hold" rating with a target price of $25. The crux of this tariff storm lies in the rules of origin determination. The China Semiconductor Industry Association (CSIA) explicitly stated that chips manufactured by Taiwan Semiconductor Manufacturing Co., Ltd. Sponsored ADR and other Taiwanese factories can be classified as "Taiwan province origin," thus avoiding tariffs as high as 125%. However, companies like Intel Corporation that have semiconductor plants in the US will have their domestically produced chips labeled as "Made in the USA," leaving them directly exposed to the tariff onslaught. CSIA pointed out, "In contrast, chips produced by Intel Corporation, Texas Instruments Incorporated (TXN.US), Analog Devices, Inc. (ADI.US), and ON Semiconductor Corporation (ON.US) may be classified as products of the US and may be subject to tariffs of 84% or higher, as these companies have foundries in the US." Data shows that the importance of the Chinese market to Intel Corporation is steadily increasing: it accounted for 27% in 2022-2023, and is expected to exceed 29% in 2024. Wells Fargo & Company analyst Aaron Racks warns that tariff policies may accelerate the loss of market share for Intel Corporation in China. The "hold" rating and $25 target price reflect the cautious attitude of institutions towards its strategic dilemma. It is worth noting that Intel Corporation's global supply chain layout exhibits a "domestic concentration + overseas dispersion" feature: domestic semiconductor plants are concentrated in states like Arizona and Oregon, while assembly and testing bases are retained in China, Vietnam, and other locations. The $28 billion Ohio super factory is considered a core support point for its domestic strategy. Currently, the shadow of tariffs has cast a shadow over the earnings season. Intel Corporation is expected to report revenue of $12.31 billion and zero adjusted earnings per share on April 24. As of Thursday's close, the stock fell by 1.56%, seeming like the market's early vote on this ambitious local expansion gamble. This supply chain game spanning the Pacific is pushing Intel Corporation to a strategic crossroads: sticking to domestic manufacturing may solidify political leverage, but it also means enduring heavy tariff pressure; following competitors in adopting an outsourcing model would entail giving up decades of manufacturing advantage.