In brief: TSMC has reportedly proposed a joint venture that would see it take a stake in Intel's foundry business alongside Nvidia, AMD, Broadcom, and Qualcomm. We've been hearing that TSMC has been eyeing some or all of Intel's plants for weeks now, and the Trump administration has requested that the Taiwanese chip giant help turn around the troubled US firm.
The proposal would see TSMC run Intel's foundry division operations, but it would not own more than 50%, Reuters writes. The Trump administration does not want either Intel or its foundry business to be entirely foreign-owned.
Earlier this month, government officials met with TSMC executives to raise the idea of a deal between the company and Intel. TSMC was said to be receptive, which likely came as a relief to the administration as it looks at contingency plans in the event of Intel crashing even further.
Bloomberg reported at the time that any potential deal may see US firms take equity stakes in Intel's manufacturing business, stopping it from being entirely owned by a foreign company. Not only could TSMC provide a financial boost, but its operational knowledge would also be a huge benefit for Intel.
Intel's foundry division reported a loss of over $13 billion on $17.5 billion in revenue last year, a stark contrast to the $41.1 billion in operating profit and $90 billion in revenue TSMC reported. Intel's overall net loss for the year stood at $18.8 billion, its first annual loss since 1986.
The Trump administration would still need to approve any final deal. No word on how much it would be worth, though a company filing revealed that the foundry division's property and plant equipment had a book value of $108 billion as of December 31.
It's still unknown whether the companies will agree to TSMC's proposal – the prospect of investing in a business losing billions might not be too appealing. AMD in particular understands the difficulties associated with this area, having sold its foundry business in 2009.
It was reported late last year that Qualcomm had approached Intel with an acquisition offer. It backed off from a full acquisition in November, though buying select divisions remain a prospect.
Intel has been awarded approximately $7.86 billion in direct funding under the Chips Act, which will go toward building and upgrading semiconductor fabrication facilities in Chandler, Arizona; New Albany, Ohio; Hillsboro, Oregon; and Rio Rancho, New Mexico. It also received a $3 billion contract for producing chips for the US military, bringing its total Chips funding to $11 billion.
TSMC this month announced that it would be investing an extra $100 billion in the United States' chip manufacturing industry, adding to a previous $65 billion commitment. The money will go toward building new chip facilities and an R&D center, creating 40,000 construction jobs and tens of thousands of "high-paying, high-tech jobs" over the coming years.
TSMC seeks Intel foundry stake in joint venture with Nvidia, AMD, Broadcom, and Qualcomm
