TSMC Negotiates Acquisition of Intel’s Factories with Partners

Taiwanese technology giant TSMC is negotiating with American chip manufacturers, including Nvidia, AMD, and Broadcom, about investing in a joint venture that would manage Intel’s factories, Reuters reports. According to TSMC’s proposal, the Taiwanese company would take over management but not a majority stake.

Specifically, TSMC would assume operational management of Intel’s chip manufacturing division, which customizes chips to meet specific client needs. However, the Taiwanese company would not own more than 50 percent of the stake, sources claim, adding that TSMC has presented the same proposal to the American company Qualcomm.

According to Reuters, the negotiations are still in the early stages and were initiated after the administration of U.S. President Donald Trump asked TSMC to help stabilize Intel’s production. This is the first time details of the plan have been revealed, under which TSMC would hold a minority stake and seek more partners to invest in Intel’s production.

Trump, of course, does not want Intel to come under majority foreign ownership, so his and his administration’s approval will be crucial for the deal to materialize. The value of the potential contract is currently unknown, and the goal is for Intel and its chip manufacturing division not to be fully foreign-owned, sources indicate.

Intel – $18.8 Billion Loss

Ultimately, the future of the American giant is at stake, whose shares have lost more than half their value in the past year. Intel recorded a net loss of $18.8 billion, the first such loss since 1986. According to the company’s report, the book value of the assets and equipment of the chip manufacturing division at the end of 2024 was $108 billion.

Following the announcement of potential TSMC investment, Intel’s shares rose by 6 percent on the U.S. stock market. At the same time, shares of Nvidia, AMD, Broadcom, and Qualcomm rose between 1.18 and 6.64 percent, while TSMC closed trading in Taiwan with a gain of 1.8 percent.

According to Reuters, Trump is extremely interested in Intel’s recovery as he wants to strengthen American production of advanced chips. TSMC presented its proposal to American companies before announcing plans on March 3 for a new investment of $100 billion in the U.S., which includes building five new factories in the coming years. Negotiations for a joint venture for Intel’s division have continued since then, and TSMC is seeking to attract more partners.

Intel Refuses to Sell Parts of the Company

Although several companies have expressed interest in purchasing individual parts of Intel, it seems that the company has refused to sell its chip design division separately from the manufacturing division. Qualcomm previously participated in negotiations for a potential purchase of all or part of Intel but ultimately withdrew. Additionally, there are divisions within the company itself – some members of Intel’s board support the deal with TSMC, while part of the management strongly opposes it, sources tell Reuters.

Intel’s chip manufacturing division, known as the foundry division, was a key element of former CEO Pat Gelsinger’s strategy to save the company. However, Gelsinger was forcibly removed in December, and the management appointed two interim directors who halted plans for the development of a new AI chip.

Collaboration between TSMC and Intel faces significant technical challenges. The two companies use different processes, chemicals, and manufacturing tools, which could complicate potential integration, sources familiar with the business say. Intel previously had manufacturing partnerships with Taiwanese UMC and Israeli Tower Semiconductor, which could serve as a model for collaboration with TSMC. However, it remains unclear how business and technological secrets would be protected. The Taiwanese company expects that investors in the joint venture will also be buyers of advanced Intel chips.

Reuters reported last week that Nvidia and Broadcom are testing chip production in Intel’s factories using the most advanced technology known as 18A. AMD is also assessing whether Intel’s 18A technology is suitable for its production. However, the 18A process has been a contentious issue in negotiations between Intel and TSMC. During talks in February, Intel executives claimed that their 18A manufacturing technology is superior to TSMC’s 2-nanometer process.

Negotiations between TSMC and Intel are taking place at a sensitive time for the American chip industry. While the Trump administration seeks to prevent complete foreign oversight of this key sector, Intel is facing serious financial problems. Whether TSMC’s takeover of management will save Intel or provoke further conflicts in the technology sector remains an open question.