TSMC Eyes Joint Venture to Operate US Intel’s Foundries

TSMC, the world's largest contract chipmaker, has proposed to NVIDIA, AMD, Broadcom, and Qualcomm the creation of a joint venture to operate Intel's foundries. According to Reuters, TSMC would acquire a stake of no more than 50% in the venture, but talks are at an early stage.

"US President Donald Trump's administration has asked TSMC to help turn around the beleaguered US industrial icon," say unnamed sources cited by Reuters. The proposal is part of an effort to revitalize advanced chip manufacturing in the United States, a strategic sector for the country's economy and national security.

Intel, historically one of the leaders in the semiconductor industry, has faced significant challenges in recent years. In 2024, the company reported a net loss of US$18.8 billion, its first since 1986, due to significant impairments in its business. Its foundry division, valued at US$108 billion at the end of 2023, has been key in efforts to regain its market position. However, competition with TSMC, which dominates advanced chip manufacturing, has hampered its progress.

TSMC's proposal comes at a time when the United States is looking to strengthen its semiconductor production capacity to reduce its dependence on Asia. The Trump administration has pushed initiatives to revitalize advanced manufacturing, and TSMC recently announced a US$100 billion investment in the United States, including the construction of five new chip manufacturing facilities.

TSMC's proposal implies that the Taiwanese giant would manage the operations of Intel's foundry division, but would own no more than 50% of the joint venture, says Reuters. This structure would allow Intel to maintain significant control over its assets, while leveraging TSMC's expertise and capabilities in advanced chip manufacturing.

NVIDIA, AMD, Broadcom, and Qualcomm have allegedly been approached as potential joint venture partners. Qualcomm, in particular, had previously explored the possibility of acquiring part of Intel, but abandoned negotiations.

One of the most controversial aspects of the discussions has been Intel's 18A manufacturing technology, which the company claims is superior to TSMC's 2-nanometer process. This technical discrepancy could pose a significant challenge to the integration of the two companies' operations, as they use very different processes, chemistries and tooling configurations.

In addition, TSMC's proposal seeks for potential investors in the joint venture to also be Intel's advanced manufacturing customers. This approach could strengthen Intel's market position while diversifying its customer base.

A final deal would require approval from the Trump administration, which has expressed interest in preventing Intel or its foundry division from being wholly foreign-owned.