- TSMC (TSM) has proposed a joint venture to manage Intel’s foundry division, capping its stake at 50%, and pitched Nvidia, AMD, Broadcom, and Qualcomm as partners, following a Trump administration request to aid the struggling U.S. chipmaker.
- Intel’s (INTC) stock rose over 8% to $21.37 in premarket trading despite a 54% year-over-year decline, as the company resists selling its chip design house separately and faces internal divisions over the TSMC deal.
- The early-stage talks, requiring U.S. government approval, aim to leverage TSMC’s expertise and a multi-partner model to revive Intel’s foundry, aligning with TSMC’s $100 billion U.S. investment plan announced on March 3.
Intel‘s (INTC) stock surged by more than 8% to $21.37 in premarket trading on Wednesday, reflecting a glimmer of hope for the beleaguered U.S. chipmaking giant amidst a challenging period that has seen its shares plummet by over 54% year-over-year. This uptick follows a Reuters report detailing a proposal from Taiwan Semiconductor Manufacturing Company (TSM), the world’s leading contract chipmaker, to collaborate with prominent U.S. chip designers – Nvidia (NVDA), Advanced Micro Devices (AMD), Broadcom (AVGO), and Qualcomm (QCOM) – in a joint venture aimed at revitalizing Intel’s foundry division. According to four sources familiar with the matter, TSMC has positioned itself to spearhead the operational management of Intel’s factories, which specialize in producing chips tailored to customer specifications, while capping its ownership at no more than 50%.
The discussions, still in their nascent stages, underscore a strategic pivot prompted by the Trump administration’s directive to TSMC to aid in rescuing Intel, a cornerstone of American industrial prowess now grappling with operational and market challenges. This initiative aligns with broader U.S. efforts to bolster domestic semiconductor capabilities, a priority heightened by geopolitical tensions and supply chain vulnerabilities. TSMC’s outreach to potential partners, including its pitch to Qualcomm – confirmed, the reports says, by one source and corroborated by another – demonstrates an intent to distribute risk and leverage the technological expertise of multiple industry leaders. Notably, TSMC’s proposal predates its March 3 announcement alongside President Trump of a $100 billion investment to construct five new chip facilities in the U.S., signaling a dual-track strategy to expand its footprint while addressing Intel’s woes.
Intel’s foundry division, a critical asset in its portfolio, has drawn interest from multiple suitors, yet the company has rebuffed offers to divest its chip design house independently, as affirmed by two of the sources. This stance reflects a commitment to maintaining an integrated business model, even as internal divisions emerge—board members have endorsed negotiations with TSMC, while some executives, as per the report, staunchly oppose the deal. The joint venture’s structure, limiting TSMC to a minority stake, is designed to assuage concerns from the Trump administration, which has made clear its opposition to full foreign ownership of Intel or its foundry operations. Any agreement, the value of which remains undisclosed, would require federal approval, adding a layer of complexity to the ongoing talks.
TSMC’s vision for the partnership extends beyond a single collaborator, with three sources indicating a preference for a consortium of chip designers to share the venture’s stakes and responsibilities. This collaborative approach could harness Nvidia’s prowess in graphics processing units, AMD’s advancements in central processing units, and Broadcom’s expertise in networking chips, potentially transforming Intel’s foundry into a competitive force in the custom chip market. Qualcomm, however, has stepped back from earlier talks to acquire Intel outright or in part, according to the publication, leaving its role in the joint venture uncertain.
The stakes are high for Intel, once a titan of the semiconductor industry, now facing a critical juncture. TSMC’s operational leadership could inject much-needed efficiency and innovation into Intel’s foundry, leveraging the Taiwanese firm’s unrivaled manufacturing expertise. Yet, the deal’s success hinges on navigating internal resistance, securing regulatory clearance, and aligning the interests of multiple high-profile partners. As of March 12, the tech sector watches closely, with Intel’s 8% premarket spike serving as a barometer of investor confidence in this bold, albeit untested, rescue plan. The outcome could redefine U.S. chipmaking competitiveness for years to come, balancing national interests with the realities of a globalized industry.
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