Intel and Taiwan Semiconductor Manufacturing Co (TSMC) are reportedly joining hands to set up a new joint chipmaking venture.
According to a report by The Information, the semiconductor leaders have reached an agreement to form a joint venture that would manage Intel’s Foundry business.
TSMC is expected to take a 20% stake in the venture —not by contributing capital, but by sharing its chipmaking expertise and training Intel employees.
Media reports speculated that TSMC had pitched the idea of a joint venture to Nvidia, AMD, and Broadcom, following a request from the U.S. administration to assist in Intel’s revival.
Intel’s struggles
Despite investing billions to expand its chip-making business, Intel has struggled to regain its footing after missing out on the AI-driven semiconductor boom.
In an effort to bring the business back on track, the company appointed former board member and semiconductor industry veteran Lip-Bu Tan as CEO in March.
Facing stiff competition from TSMC, the company’s attempts to manufacture chips for external clients met several setbacks, leading to delays and failed tests.
The challenges contributed to Intel reporting a $18.8 billion net loss for 2024—its first since 1986—driven by large impairments.
Uncertainty over TSMC’s role
It remains unclear as to how TSMC will be involved with Intel’s U.S. factories.
Many of these facilities are designed specifically to produce Intel’s own processors, including those using Intel 3 and Intel 4 technology, while only a few can manufacture chips on Intel’s 18A process.
Additionally, questions remain about how TSMC’s 20% stake in Intel Foundry aligns with its separate $165 million investment in Arizona’s Fab 21, where it manufactures chips for partners like Apple.
Last month, TSMC announced it plans to invest an additional $100 billion in the U.S. to build five more chip facilities, a move revealed at a press event alongside former U.S. President Donald Trump.
Reports suggest the Trump administration played a role in initiating discussions aimed at helping Intel’s turnaround, as concerns over potential mass layoffs at the company grow.
Both companies have not yet commented on the matter. However, the report said that the preliminary deal would involve at least some of Intel’s existing chip foundries.
Intel had previously embarked on an ambitious expansion plan in 2021 under former CEO Pat Gelsinger, investing heavily in new fabs in Arizona, Ohio, and Oregon.
The semiconductor company secured over $7.8 billion from the CHIPS Act to support its expansion, including a $36 billion investment in Oregon.
However, declining sales and mounting losses have raised concerns among investors and analysts about whether Intel can sustain such an expensive and risky venture.
In 2024, Intel cut 15,000 positions globally, including 3,000 in Oregon, where it employs about 20,000 people.
In February this year, the company announced it was slowing down work on its Ohio fabs.
