TSMC has approached U.S. chip designers Nvidia, Advanced Micro Devices, and Broadcom to discuss participating in a joint venture to oversee Intel's factories, as reported by sources familiar with the matter. The proposed partnership would involve TSMC managing Intel's foundry division operations, tailored to customer requirements, with TSMC holding no more than a 50% stake. Qualcomm has also been approached by TSMC.
The discussions, still preliminary, follow a request by the U.S. President's administration for TSMC to help revitalize Intel, a leading U.S. industrial company. The specifics of TSMC's proposed limited stake and its outreach to potential partners have not been previously disclosed.
Any potential agreement, which needs approval from the Trump administration, aims to safeguard Intel's future, as its stock value has dropped significantly. Intel recently reported its first net loss since 1986, driven by substantial impairments. The proposal has sparked interest, leading to an increase in Intel's stock value while awaiting further developments.
The joint venture initiative by TSMC was made prior to its announcement of plans to broaden its U.S. presence by establishing additional chip facilities, aligning with Trump's agenda to bolster American manufacturing. Discussions about the venture with Intel's foundry division are ongoing, with TSMC exploring multiple partnerships with chip designers.
While various entities have shown interest in acquiring parts of Intel, the company is said to have declined offers to separate its chip design unit from the foundry division. Qualcomm, previously involved in acquisition talks with Intel, has withdrawn from negotiations.
Intel board members have shown support for the proposed collaboration, while some executives remain apprehensive. The endeavor, if realized, would encounter challenges due to differences in manufacturing processes between TSMC and Intel, necessitating substantial effort and resources to align operations successfully.
Previous collaborative ventures with other companies may provide a blueprint for cooperation between TSMC and Intel, although the protection of trade secrets poses a key challenge. TSMC seeks investors in the joint venture who are also Intel's advanced manufacturing clients.
Notably, Nvidia and Broadcom are reported to be utilizing Intel's advanced production techniques, such as 18A, while AMD is evaluating its compatibility with Intel's 18A manufacturing process. Intel has asserted the superiority of its 18A technology over TSMC's 2-nanometer process during discussions in February.