TSMC Proposes Joint Venture for Intel Foundries

On Mar 12, 2025

Taiwan Semiconductor Manufacturing Company (TSMC) is in talks with U.S. chipmakers, including Nvidia, AMD, Broadcom, and Qualcomm, about taking stakes in a joint venture to operate Intel’s factories, according to sources familiar with the discussions.

Proposal Details

TSMC’s Role: The Taiwanese chipmaker would manage Intel’s foundry division, which customises chips for clients.
Ownership Limit: TSMC would own no more than 50% of the venture to comply with U.S. government preferences.
Potential Investors: Qualcomm has also been approached, according to multiple sources.

Background and Government Involvement

U.S. Government Appeal: The Trump administration requested TSMC’s involvement to help revitalise Intel, an iconic but struggling U.S. industrial company.
Approval Required: Any agreement would need administration approval to prevent Intel from becoming fully foreign-owned.
Financial Challenges for Intel Performance Decline: Intel shares have dropped by more than 50% in the last year.
Net Loss: The company reported an $18.8 billion net loss in 2024, its first since 1986.
Asset Valuation: Intel’s foundry division’s property and equipment were valued at $108 billion as of December 31, 2024.

Industry Context and Challenges

TSMC’s $100 Billion U.S. Investment: Talks of the joint venture began before TSMC announced plans to build five additional U.S. facilities.
Operational Hurdles: A deal between Intel and TSMC would face complexities due to differing processes, chemicals, and chipmaking tools used by the companies.
Historical Precedents: Intel has previously partnered with Taiwan’s UMC and Israel’s Tower Semiconductor, which could serve as models for collaboration.

Stakeholder Dynamics

Internal Disagreements: Intel’s board supports a deal, but some executives are resistant.
Executive Turnover: Former CEO Pat Gelsinger was ousted in December, and interim co-CEOs have paused development of Intel’s forthcoming AI chip.

Advanced Manufacturing and Technology Concerns

Potential Partners Testing Intel’s Technology: Nvidia, Broadcom, and AMD are evaluating Intel’s cutting-edge 18A manufacturing process.
Debates Over Manufacturing Superiority: Intel executives reportedly asserted that their 18A process is superior to TSMC’s 2-nanometer technology during February negotiations.

This joint venture proposal highlights the intensifying competition in the semiconductor industry and the growing need for collaboration to stay at the forefront of innovation.