Taiwan Semiconductor Manufacturing Company (TSMC) has pitched a joint venture (JV) to operate Intel’s foundry business in the United States, engaging major chipmakers Nvidia, AMD, and Broadcom in discussions.
Reuters reports that Qualcomm was also approached regarding potential involvement.
Under the proposed deal, TSMC would manage Intel’s foundry operations but would not own more than 50% of the JV. This structure is designed to ensure that Intel’s foundry business remains under partial U.S. control, a key requirement for securing approval from President Donald Trump’s administration. The talks, which remain in early stages, follow previous discussions about Intel potentially spinning off its foundry division due to ongoing financial struggles.
Background and Strategic Considerations
The discussions arise amid a rapidly growing demand for semiconductor manufacturing, particularly for artificial intelligence (AI) and data center applications. TSMC’s initiative aligns with its broader commitment to expanding U.S.-based chip production. Earlier in March, the company announced a $100 billion investment in U.S. chipmaking infrastructure, including five new facilities.
Intel’s foundry division has faced significant challenges, with the company reporting a net loss of $18.8 billion in 2024, its first annual loss since 1986. The division’s property, plant, and equipment had a book value of $108 billion as of December 31, 2024. With Intel’s shares losing over half their value in the past year, the Trump administration is keen to revive the firm as part of efforts to bolster U.S. advanced manufacturing.
Industry Interest and Technical Challenges
Both Nvidia and Broadcom have reportedly conducted manufacturing tests using Intel’s advanced 18A production process, with AMD also evaluating its suitability. However, the integration of Intel’s and TSMC’s manufacturing processes presents significant challenges, as the two companies employ vastly different materials, tools, and production techniques.
Intel’s board has been engaged in negotiations with TSMC, though some executives remain opposed to the deal. The proposed JV would require careful handling of trade secrets and intellectual property, especially given Intel’s previous manufacturing partnerships with Taiwan’s UMC and Israel’s Tower Semiconductor.
Regulatory and Market Implications
Any agreement would require approval from the Trump administration, which has expressed concerns about full foreign ownership of Intel’s facilities. The proposed 50% cap on TSMC’s stake is designed to address these concerns while securing critical U.S. industry backing.
Despite interest from multiple companies in acquiring parts of Intel’s business, the firm has resisted selling its chip design division separately from the foundry unit. Qualcomm, initially involved in discussions, has reportedly exited considerations for acquiring all or part of Intel.
The negotiations continue as the semiconductor industry faces increased geopolitical and economic pressures, with companies seeking to ensure long-term stability and technological leadership in advanced chip manufacturing.
