Phoenix, AZ – March 12, 2025 – Taiwan Semiconductor Manufacturing Company (TSMC, 2330.TW), the world’s leading contract chipmaker, has approached prominent U.S. chip designers—including Nvidia (NVDA.O), Advanced Micro Devices (AMD) (AMD.O), Broadcom (AVGO.O), and Qualcomm (QCOM.O)—with a bold proposal to form a joint venture aimed at taking over and operating Intel’s (INTC.O) struggling foundry division, according to four sources familiar with the matter.
The plan, still in early discussions, would see TSMC manage Intel’s custom chipmaking operations while capping its own ownership at no more than 50%. This move would address U.S. government concerns about foreign control of a key American industrial asset.
The initiative follows a direct request from the Trump administration, which has prioritized reviving Intel. The once-dominant U.S. chipmaking giant is now grappling with a $18.8 billion net loss in 2024, its first since 1986.
According to a company filing, Intel’s foundry division was valued at $108 billion in property and equipment as of December 31. It has been a cornerstone of efforts to reclaim its competitive edge, but operational and financial woes have left it vulnerable.
TSMC’s pitch, first reported here, comes as President Donald Trump pushes to bolster American advanced manufacturing amid growing global competition in the semiconductor industry.
A Strategic Partnership with Strings Attached
Under TSMC’s proposal, the Taiwanese firm would oversee Intel’s foundry operations, which produce tailored chips for external clients, while inviting U.S. chip designers to take stakes in the joint venture.
Sources say TSMC is keen to include multiple partners—preferably companies already testing Intel’s cutting-edge 18A manufacturing process—to ensure a collaborative effort.
Qualcomm was also approached, though one source noted it has since withdrawn from earlier talks about acquiring Intel outright.
The Trump administration, wary of Intel or its foundry falling entirely into foreign hands, must approve any final deal.
While the financial scope remains unclear, the stakes are high: Intel’s stock has plummeted over 50% in the past year, and its foundry division represents a critical piece of its turnaround strategy under former CEO Pat Gelsinger, who was ousted in December. Interim co-CEOs have since shelved Intel’s next-generation AI chip, adding urgency to the situation.
TSMC’s U.S. Expansion Fuels Talks
The joint venture discussions gained traction after TSMC’s March 3 announcement, alongside President Trump, of a $100 billion investment to build five new chip factories in the U.S. over the coming years.
Sources say TSMC’s overtures to potential partners predated that pledge, but talks have since intensified. The Taiwanese giant sees the Intel deal as a way to deepen its U.S. footprint while leveraging American partners to navigate regulatory and political hurdles.
However, integrating TSMC’s operations with Intel’s foundry poses significant challenges. According to industry insiders, the two companies employ starkly different manufacturing processes, tools, and materials.
Past partnerships—such as Intel’s collaborations with Taiwan’s UMC (2303.TW) and Israel’s Tower Semiconductor (TSEM.TA)—offer some precedent, but aligning trade secrets and production methods could prove costly and complex.
Internal Divisions and Technological Tensions
Intel’s board has reportedly endorsed negotiations with TSMC, but some executives remain staunchly opposed, fearing a loss of control over the company’s future.
A sticking point in February talks was Intel’s 18A process, which company leaders touted as superior to TSMC’s forthcoming 2-nanometer technology. TSMC, meanwhile, wants joint venture investors to double as Intel foundry customers, a condition that could lock in business for the division while spreading financial risk.
Reuters reported last week that Nvidia and Broadcom are already running manufacturing tests with Intel’s 18A process, while AMD is evaluating its viability. The outcome of these trials could sway their interest in TSMC’s proposal. Qualcomm has stepped back from broader acquisition talks, leaving its role in the joint venture uncertain.
A High-Stakes Rescue Mission
For Intel, the stakes couldn’t be higher. Once a titan of the semiconductor world, it has struggled to keep pace with TSMC and others in the foundry space.
Its 2024 financial collapse, driven by massive impairments, has fueled speculation about its future, with multiple firms eyeing its assets. Yet, according to two sources, Intel has rebuffed offers to sell its chip design arm separately, insisting on keeping its foundry and design operations linked.
As talks progress, the semiconductor industry watches closely. A successful deal could reshape U.S. chipmaking, blending TSMC’s manufacturing prowess with Intel’s legacy and the innovation of partners like Nvidia and AMD.
But with technological rivalries, corporate egos, and government oversight in play, the path forward remains uncertain.
Intel, TSMC, Nvidia, AMD, and Qualcomm declined to comment. The White House and Broadcom did not respond to inquiries.
