- Intel stock spikes 7% on possible TSMC deal
- Taiwanese firm looking to take over Intel’s foundry business
- TSMC in talks with Nvidia, Broadcom, AMD, Qualcomm
Taiwanese chip manufacturer TSMC (TSM:NYSE) is trying to pull together partners that could take control of Intel’s (INTC:NASDAQ) floundering foundry business, according to reports.
TSMC is believed to have pitched a deal to chip firms Nvidia (NVDA:NASDAQ), Advanced Micro Devices (AMD:NASDAQ), Broadcom (AVGO:NASDAQ) and Qualcomm (QCOM:NASDAQ) over forming a joint venture to operate Intel’s foundry business in the US, Reuters reported overnight.
Under the proposal, TSMC would operate Intel’s factories but would not own more than 50% of the JV. Any deal will still require approval from President Trump, who has signalled his discomfort with Intel’s US foundries being owned by a foreign entity. TSMC’s commitment to own no more than a 50% stake would accommodate for this, with the remainder of the JV operators all being US-based stakeholders.
MARKETS HOLD THEIR BREATH
Talks are thought to be at an early stage after initial reports that Trump’s administration approached TSMC to help rescue Intel, which is struggling with weak sales and a loss-making foundry division. Intel was also seen earlier considering a spin-off of its foundry unit.
The potential JV comes amid increasing global demand for data centre and AI infrastructure, with adoption of AI technology expected to ramp up in the coming months. Any JV would also be in line with TSMC’s pledge to invest more in US chipmaking facilities.
The world’s largest contract chipmaker had earlier in March announced a fresh $100 billion investment in the US, in addition to its ongoing development in Arizona.
Broadcom and TSMC were first seen expressing interest in some of Intel’s operations, although no formal approach was made. The fabless business models of Nvidia, AMD and Qualcomm, where they only design advanced chips and contract manufacturing out to the likes of TSMC and others, would likely mean any involvement would be purely as investment partners rather than signalling changes to their own operating models.
HISTORIC RIVALRY
Intel and TSMC have been historic rivals in the foundry business, although the Taiwanese firm has swept ahead during the AI boom thanks to more competitive and advanced chipmaking capabilities, a fact that has weighed heavily on Intel’s share price.
Intel’s stock has lost more than 70% of its value since April 2021, and the shares’ continued underperformance is thought to have been a big factor in the shock departure of CEO Pat Gelsinger in December 2024.
Stock futures indicate TSMC’s New York listed ADRs rising modestly when trading restarts later today, but more interestingly, Intel is seen opening more than 7% higher at $21.20, having fallen 56$ over the past 12 months.
