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INTC shares surged nearly 200% in six months, but Intel’s $9 billion NAND sale left it scrambling for scarce AI memory supply.
Lip-Bu Tan acknowledged Intel must now secure memory externally while rivals SK hynix, Samsung, and Micron hold AI capacity booked years in advance.
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The semiconductor industry has a funny way of changing the rules just when companies think they’ve figured them out. A few years ago, the hottest chip businesses were processors and foundries. Memory was viewed as a cyclical commodity business that could swing from shortages to gluts in a matter of quarters.
Fast forward to 2026, and artificial intelligence has turned memory into one of the most valuable pieces of the AI supply chain. That shift helps explain why Intel‘s (NASDAQ:INTC | INTC Price Prediction) biggest strategic challenge today may stem from a decision it made nearly five years ago.
Just a year ago, Intel looked like a company fighting for survival. Rivals including Broadcom (NASDAQ:AVGO), Taiwan Semiconductor Manufacturing (NYSE:TSM), Advanced Micro Devices (NASDAQ:AMD), and Nvidia (NASDAQ:NVDA) were reportedly exploring ways to acquire pieces of Intel’s business or potentially pursue larger transactions. The company’s foundry ambitions were burning cash, market share losses had mounted, and investors questioned whether Intel could remain a leading semiconductor manufacturer.
Then the script flipped. Government support — including a near-10% ownership stake and broader strategic backing for domestic semiconductor manufacturing — dramatically altered perceptions of Intel’s future. Instead of becoming a breakup candidate, Intel became a national technology priority.
The result has been one of the market’s most surprising recoveries. Intel shares have climbed nearly 200% over the past six months as investors began pricing in a viable turnaround story rather than a restructuring case.
But success has revealed a new problem.
In late 2021, Intel completed the sale of its NAND memory business to SK hynix for approximately $9 billion. At the time, the move made sense.
Memory had long been one of the semiconductor industry’s most cyclical markets. Prices frequently swung based on supply and demand, margins could evaporate quickly, and Intel needed capital to fund its manufacturing ambitions. Selling the business allowed management to focus on CPUs, foundry services, and higher-priority growth initiatives. The logic was difficult to argue with in 2021.
Today, however, the AI boom has changed the economics of memory. The global memory market is now dominated by a handful of suppliers, with DRAM and NAND becoming essential components of AI infrastructure. High-bandwidth memory (HBM) in particular has become a critical bottleneck for AI systems.
That creates a problem for Intel. Rather than producing its own memory, Intel now has to compete for supply. As CEO Lip-Bu Tan recently told analysts:
“We used to have a memory business. We sold it to SK hynix. So right now, we have to figure out a way to really secure some of the memory requirement to serve our customer.”
That’s not the kind of statement investors want to hear during a supply shortage.
The change is ironic. Intel spent years trying to become a world-class foundry. It now has renewed momentum, government backing, and growing demand for advanced chips. Yet one of the industry’s fastest-growing profit pools sits outside its walls.
Granted, Intel couldn’t have predicted the exact scale of today’s AI boom. Selling the NAND business in 2021 wasn’t irrational — it was arguably necessary given the company’s financial and strategic priorities at the time.
That said, AI has transformed memory from a cyclical side business into a strategic necessity. Industry leaders such as SK hynix, Samsung, and Micron (NASDAQ:MU) are benefiting from shortages that have left portions of their AI-related memory capacity effectively spoken for years in advance.
Intel now finds itself on the opposite side of that equation.
In short, Intel’s sale of its memory business wasn’t a mistake when it happened. The company needed focus, capital, and a path forward. The regret comes from how dramatically the market changed afterward.
Intel has engineered a remarkable turnaround and regained credibility with investors. That’s still a major achievement. But the AI era has elevated memory from a cyclical commodity to a strategic resource, and Intel no longer controls its own supply.
While Intel’s future still looks brighter than it did a year ago, shareholders should recognize that one of the company’s biggest growth constraints may be a business it willingly sold for $9 billion five years ago.
Contact [email protected] for any questions or corrections.
After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, and Money Morning. He has been featured in both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.
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