Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading contract chip maker, has reportedly approached several major U.S. chip designers—Nvidia, AMD, Broadcom, and Qualcomm—with a proposal to form a joint venture that would take control of Intel’s foundry division. This move is part of a broader strategy to address the troubled state of Intel, the iconic American chip manufacturer that has been struggling financially and technologically.
The joint venture would see TSMC running Intel’s foundry operations, which specialize in producing chips tailored to the needs of various clients. However, according to multiple sources familiar with the matter, TSMC would not own more than 50% of the venture. The discussions, still in the early stages, come at the request of the Trump administration, which has been pushing for efforts to revitalize Intel and boost the U.S. manufacturing sector. The U.S. government’s involvement is seen as a crucial factor in ensuring that Intel’s foundry division remains under partial U.S. control, despite the significant foreign investment from TSMC.
TSMC’s proposal aims to leverage its advanced manufacturing capabilities to turn around the fortunes of Intel’s foundry business, which has been a key asset in the company’s efforts to regain a competitive edge in semiconductor production. Sources familiar with the talks revealed that Qualcomm has also been approached to join the venture, but no concrete agreements have been made yet.
The broader context of these discussions centers on Intel’s ongoing financial troubles. The company’s stock has plummeted over 50% in the past year, and it recently reported a staggering net loss of $18.8 billion in 2024, marking its first loss since 1986. The company’s foundry division, which includes state-of-the-art manufacturing facilities, had a book value of $108 billion as of December 31, 2024. This division has been identified as a critical asset in Intel’s future, but its current operational challenges and financial struggles have raised questions about its long-term viability under Intel’s ownership.
TSMC’s potential involvement in Intel’s operations has been a topic of great interest since early March, when TSMC announced a significant $100-billion investment in the United States. This investment includes plans to build five new chip manufacturing facilities in the coming years, which will play a crucial role in enhancing the U.S. semiconductor industry. The timing of TSMC’s proposal to take control of Intel’s foundry division suggests that the Taiwanese company is looking to expand its influence in the U.S. while also helping to rejuvenate Intel, an American semiconductor giant facing an uncertain future.
Although TSMC has pitched the idea to several major chipmakers, it is still unclear who would eventually become the venture’s key partners. According to sources, TSMC has been keen to secure multiple investors in the venture, with a preference for those who are also current customers of Intel’s advanced manufacturing processes. This strategy could ensure that the venture remains tightly aligned with the needs of chip designers like Nvidia, AMD, and Qualcomm, who rely on Intel’s cutting-edge production capabilities.
Despite the complexity of the negotiations, there have been reports that Intel’s board of directors has shown interest in the deal. However, some senior executives within the company have opposed the move, particularly given the historical rivalry between Intel and TSMC in the semiconductor market. Intel’s former CEO, Pat Gelsinger, had championed the foundry division as a key element in Intel’s recovery strategy, but he was ousted in December 2024. Intel has since appointed two interim co-CEOs and scaled back plans for its upcoming AI chips, signaling ongoing leadership uncertainty at the company.
In addition to internal challenges at Intel, the joint venture would face significant technical hurdles. Intel and TSMC use different manufacturing processes, materials, and equipment at their respective factories. Sources have indicated that these differences could complicate any potential partnership, particularly when it comes to sharing sensitive manufacturing knowledge and trade secrets. Intel has previously worked with Taiwan’s United Microelectronics Corporation (UMC) and Israel’s Tower Semiconductor in manufacturing partnerships, but these collaborations have been limited compared to the scope of the proposed venture with TSMC.
One of the key points of contention in the discussions has been Intel’s advanced 18A manufacturing technology. This cutting-edge process is a source of pride for Intel, as it offers a competitive edge over TSMC’s 2-nanometer process. In talks with TSMC, Intel executives reportedly emphasized that their 18A process was superior, potentially making it a cornerstone of the joint venture’s success. However, TSMC and other potential partners would need to weigh the value of this technology against Intel’s current challenges and its long-term prospects.
As the talks continue, the future of Intel’s foundry division remains uncertain. While a partnership with TSMC could help stabilize the division and revitalize its manufacturing capabilities, the details of any potential deal are still unclear. Any agreement would likely require approval from the U.S. government, which has made it clear that it does not want Intel’s foundry division to fall entirely under foreign ownership. Additionally, discussions about selling parts of Intel’s business have been ongoing, though the company has rejected proposals to sell its chip design house separately from its foundry operations.
The outcome of these talks will have significant implications not only for Intel and TSMC but also for the broader U.S. semiconductor industry, which is a key focus of the Trump administration’s efforts to boost advanced manufacturing in the country. As TSMC and its potential partners move forward with negotiations, the fate of one of America’s most important technology companies hangs in the balance.
