TSMC seeks Intel foundry stake in joint venture with Nvidia, AMD, Broadcom, and Qualcomm
TSMC proposes to run Intel's foundry with Nvidia, AMD, Qualcomm, Broadcom support.
Taiwan Semiconductor Manufacturing Co. (TSMC) has reportedly presented a plan for a joint business venture involving itself, Nvidia, AMD, Broadcom, and Qualcomm to acquire a stake in Intel's foundry operations. This strategic move has been initiated amidst calls from the Trump administration to aid Intel, a beleaguered U.S. technology firm, in stabilization efforts. TSMC's influential proposal would involve it taking over Intel's foundry division operations, although it plans not to have more than a 50% ownership to satisfy U.S. governmental conditions. Media outlets like Reuters highlight a strong urgency from the U.S. administration to avoid foreign control of a significant national asset, marking this potential collaboration as a critical maneuver.
Recent reports suggest that the initiative follows on from multiple exploratory discussions between the Taiwanese semiconductor giant and U.S. government agencies, initiated earlier this year. According to Bloomberg, contingency plans are being considered to prevent Intel from financial collapse, with potential capital infusion from U.S. firms. Not only does TSMC bring a possible financial lifeline, but its profound operational acumen is viewed as pivotal for Intel's operational rehabilitation. This large-scale collaboration is viewed as a strategic effort to harness TSMC's experience in manufacturing to stimulate economic benefits and ensure technological progress within the U.S.
Intel's corporate performance reveals the necessity of such an intervention, with its foundry division incurring a $13 billion loss against a $17.5 billion revenue last year, contrasting sharply with TSMC's reported $41.1 billion in operating profit and $90 billion revenue. Intel's full-year net loss was recorded at $18.8 billion, the first annual net loss since 1986, raising substantive concerns about the company's future viability. The Trump administration's requirement for transaction approval suggests significant regulatory oversight for defense and national security interests.
Qualcomm had earlier explored acquiring Intel, hinting at an industry-wide acknowledgment of Intel's strategic value, although a complete acquisition was later deferred. The administration's $11 billion allocation under the Chips Act raises another strategic focus, supporting the company's operative facilities in Arizona, Ohio, Oregon, and New Mexico. Moreover, a $3 billion military contract highlights Intel's ongoing importance to national security objectives, further accentuating the relevance of potential TSMC intervention.
TSMC's announcement to invest an additional $100 billion in the U.S. chip manufacturing sector signifies a substantial commitment to the American semiconductor industry. Expanding on its previous $65 billion investment, the capital will aid in building new production facilities and bolstering research and development capabilities. The commitment is projected to create 40,000 construction jobs and a multitude of high-tech positions moving forward. This expansion punctuates TSMC's proactive efforts to augment American semiconductor production capabilities, providing critical infrastructure and employment opportunities to reinforce the economy.
Sources: Reuters, Bloomberg, TechSpot