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TSMC pitched Intel foundry JV to Nvidia, AMD and Broadcom

TSMC pitched Intel foundry JV to Nvidia, AMD and Broadcom

  • 3 hours ago
  • thehindu.com
  • Keywords: AI, Startup

TSMC has pitched a joint venture with Intel's foundry division to Nvidia, AMD, and Broadcom, seeking partners to help revive Intel while maintaining majority control. Talks were initiated after the U.S. government requested TSMC's assistance in turning around Intel, a key American chipmaker struggling financially.

Nvidia News

Estimated market influence

TSMC

Positive
Analyst rating: N/A

TSMC is pitching a joint venture to Intel's foundry division, which could potentially boost their market position.

Intel

Intel

Negative
Analyst rating: Neutral

Intel reported a significant net loss in 2024 and is seeking partnerships to turnaround its fortunes.

Context

Analysis of TSMC's Pitch to Nvidia, AMD, and Broadcom for Intel Foundry JV

Key Facts and Data Points

  • TSMC's Proposal: TSMC has pitched U.S. chipmakers Nvidia, AMD, Broadcom, and Qualcomm to take stakes in a joint venture (JV) that would operate Intel’s foundry division.
  • Ownership Structure: Under the proposal, TSMC would not own more than 50% of the JV, with the remaining stake held by other investors.
  • Intel's Financial Struggles: Intel reported a net loss of $18.8 billion in 2024, its worst performance since 1986. Its shares have lost over half their value in the last year.

Market Trends and Business Impact

  • U.S. Tech Policy Focus: The proposal follows pressure from the Trump administration to revive Intel, a key U.S. industrial icon.
  • Semiconductor Industry Dynamics: The move highlights the growing competition in the semiconductor manufacturing sector, with TSMC seeking strategic partnerships to strengthen its position.

Competitive Landscape

  • Potential Partnerships: Nvidia, AMD, and Broadcom are evaluating opportunities to collaborate with Intel’s foundry division, leveraging Intel's advanced 18A manufacturing process.
  • Intel's Strategic Shifts: Intel’s focus on contract manufacturing under former CEO Pat Gelsinger has faced challenges, leading to the mothballing of its AI chip initiative.

Regulatory and Policy Implications

  • Foreign Ownership Restrictions: The Trump administration is reportedly against full foreign ownership of Intel or its foundry division, necessitating regulatory approval for any deal.
  • U.S. Advanced Manufacturing Goals: The proposal aligns with broader U.S. efforts to boost domestic semiconductor production and reduce reliance on foreign manufacturers.

Financial Impact

  • Stock Reactions: Intel’s stock rose 6% in early trading, while Nvidia, AMD, Broadcom, and Qualcomm saw gains between 1.18% and 6.64%. TSMC closed 1.8% higher in Taiwan.
  • Investment Hurdles: Any deal would require significant investment and operational integration, given the differing manufacturing processes between Intel and TSMC.

Long-term Effects

  • Industry Consolidation: The JV could lead to a more competitive semiconductor ecosystem, with potential shifts in market share and technological leadership.
  • Global Manufacturing Strategies: The proposal underscores the strategic importance of semiconductor production in global tech supply chains, influencing future investments and partnerships.