TSMC has reportedly proposed a joint venture to operate Intel's foundry division, engaging companies like Nvidia, AMD, Broadcom, and Qualcomm. The plan suggests that TSMC would not hold more than a 50% stake, ensuring the division is not fully foreign-owned.
Recent developments have highlighted potential collaborations and investments between TSMC and Intel, focusing on Intel's manufacturing operations.
In September 2023, Intel announced its agreement to sell approximately a 10% stake in its IMS Nanofabrication business to TSMC, valuing IMS at around US$4.3 billion. This move aimed to enhance the independence of IMS and accelerate growth in multi-beam mask writing tools essential for advanced semiconductor manufacturing, with Intel retaining majority ownership.
In a recent report, Reuters cited sources stating that TSMC has pitched a joint venture in operating Intel's factories to US chip designers. Although TSMC would run the operations of Intel's foundry division, it would not own more than 50%. This is due to the fact that the Trump administration has expressed reluctance to support foreign entities operating Intel's US factories. Any potential partnership would require significant adjustments and concessions from both companies and would need US government approval to ensure national security interests are maintained.
Additionally, some Intel executives oppose selling its chip design house separately, and differences in manufacturing processes between TSMC and Intel present integration challenges. Intel's 18A has also been an area of contention in negotiations between the two companies, with Intel executives claiming that it is superior to TSMC's 2nm process.
Intel's financial struggles and strategic responses
Intel has faced significant financial challenges recently, marked by declining revenues and substantial losses. According to The Financial Times, in the fourth quarter of 2024, the company reported a 7% year-over-year decrease in sales, totaling US$14.3 billion, and a net loss of approximately US$126 million, a stark contrast to the US$2.7 billion profit in the same period the previous year.
According to Business Wire, Intel initiated a US$10 billion cost-reduction plan in August 2024, aiming to enhance operational efficiency and market competitiveness. This plan includes structural and operational realignments, headcount reductions exceeding 15%, and significant cuts in operating expenses and capital expenditures.
The company's foundry division has been a focal point of its financial struggles. In 2024, Intel Foundry reported a US$13.41 billion operating loss. To address this, Intel has been restructuring the division to attract investment, with Nvidia and Broadcom running manufacturing tests using 18A. AMD is also evaluating whether Intel's 18A is suitable for its needs.
Legal challenges have also emerged. In March 2025, Intel successfully defended itself against a shareholder lawsuit that accused the company of concealing issues within its foundry business, which allegedly led to a US$32 billion loss in market value. The court ruled that the plaintiffs failed to demonstrate that Intel misled shareholders about the unit's financial performance.
These developments underscore Intel's ongoing efforts to navigate its financial challenges and reposition itself in the competitive semiconductor industry.
A successful joint venture could provide Intel with the operational expertise and financial backing needed to turn around its foundry division. However, it could also signal a partial loss of control over a critical part of its business.
TSMC's expanding US investments and strategic moves
TSMC has significantly expanded its investments in the United States over recent years, aiming to bolster domestic semiconductor manufacturing capabilities.
According to Forbes, in 2020, TSMC announced plans to build its first US semiconductor fabrication plant in Phoenix, Arizona, with an initial investment of approximately US$12 billion. The company increased its commitment in 2022, planning a second facility and raising the total investment to US$40 billion.
In 2024, the Biden administration announced that TSMC and the US Department of Commerce signed a preliminary memorandum of terms, proposing up to US$6.6 billion in direct funding under the CHIPS and Science Act. This agreement supports TSMC's investment of over US$65 billion in three leading-edge fabs in Phoenix, Arizona.
In 2025, TSMC announced an additional US$100 billion investment in the US, bringing its total commitment to US$165 billion. Business Facilities reported that this expansion includes plans for three new fabrication plants, two advanced packaging facilities, and a major R&D center, marking it as one of the largest foreign direct investments in US history.
Managing Intel's foundries could solidify TSMC's position as the global leader in semiconductor manufacturing while also expanding its footprint in the US. However, it risks overextending its resources and facing operational challenges due to technological differences.
Implications for potential investors and the US industry
Reuters reported that Intel, TSMC, Nvidia, AMD, and Qualcomm declined to comment, while the White House and Broadcom did not respond to requests for comment.
Although participation in the joint venture could offer related companies greater influence over Intel's manufacturing capabilities, potentially securing priority access to capacity and aligning production with their needs, it also involves significant financial and strategic commitments, especially given their existing reliance on TSMC for chip production.
From the US government's perspective, the joint venture could help strengthen domestic chip production, particularly for advanced semiconductors critical to AI, high-performance computing, and national security. The involvement of a foreign company like TSMC, however, could complicate the narrative of achieving full US self-sufficiency in chip manufacturing.
Article edited by Jerry Chen
