Intel and TSMC Discuss Joint Venture to Revive Struggling Foundry Business

Intel (INTC) may be on the verge of a significant transformation as Taiwan Semiconductor Manufacturing Company (TSMC) explores a joint venture to operate Intel’s foundry business. According to Reuters, TSMC has approached several major U.S. chip designers—Nvidia, AMD, Broadcom, and Qualcomm—about taking a stake in the venture, which would help modernize Intel’s struggling foundry division while preserving U.S. control over critical semiconductor production.
Talks remain in the early stages, but the potential deal comes at a pivotal moment for Intel, which has been battling mounting losses, declining market share, and increasing competition from TSMC and Nvidia. The move could provide the struggling chipmaker with a much-needed lifeline as it fights to remain relevant in an industry it once dominated.
Intel’s Struggles and the Need for a Lifeline
Intel has faced significant challenges in recent years, with its stock losing more than half of its value over the past year. The company reported a staggering $18.8 billion net loss in 2024, its first annual loss since 1986. While Intel has poured billions into revitalizing its manufacturing operations, delays in developing advanced process nodes, supply chain disruptions, and stiff competition have eroded its competitive position.
At the same time, Intel's foundry division, once seen as a way to diversify the business, has struggled to gain traction. The company has lagged behind TSMC and Samsung in developing cutting-edge semiconductor manufacturing technology, forcing major customers like Apple and Nvidia to rely on Asian manufacturers instead.
With shares of Intel currently hovering near the critical $20 support level, a partnership with TSMC could be a decisive factor in determining whether the company can regain investor confidence or continue its downward spiral.
TSMC’s Role and the Joint Venture Proposal
Under the proposed deal, TSMC would take operational control of Intel’s foundries but would own no more than a 50% stake in the joint venture. This arrangement would allow Intel to benefit from TSMC’s technological expertise while maintaining U.S. government support for domestic chip production.
The initiative aligns with U.S. efforts to strengthen semiconductor manufacturing on home soil. President Trump has reportedly pushed for TSMC’s involvement as part of a broader strategy to revitalize Intel and reduce reliance on foreign semiconductor production. The recently announced $100 billion investment in new U.S.-based chip plants by TSMC further underscores the geopolitical importance of this deal.
Potential Customers and Strategic Implications
A key component of the proposal involves securing major U.S. chipmakers as partners in the venture. Nvidia, AMD, Broadcom, and Qualcomm—all of which have been approached by TSMC—could play a significant role in shaping the future of Intel’s foundry business.
- Nvidia (NVDA): The AI chip leader has traditionally relied on TSMC for advanced manufacturing but could explore diversification through this venture.
- AMD (AMD): Intel’s longtime rival could use the foundry to secure additional production capacity while benefiting from U.S.-based manufacturing.
- Broadcom (AVGO): As a key supplier of networking and communication chips, Broadcom’s involvement would bolster the strategic importance of Intel’s foundry operations.
- Qualcomm (QCOM): A major player in mobile and connectivity chips, Qualcomm has been exploring ways to diversify its manufacturing sources beyond TSMC and Samsung.
By securing commitments from these industry leaders, the joint venture could gain the financial and technological backing needed to compete with TSMC’s existing operations in Taiwan.
Market Reaction and Investor Outlook
Shares of Intel surged over 5% on Wednesday following the Reuters report, signaling investor optimism over the potential deal. However, skepticism remains regarding whether Intel can effectively execute this partnership while navigating its broader turnaround strategy.
Despite the stock’s recent bounce, Intel remains one of the weakest performers in the semiconductor sector. The $20 support level remains a critical technical threshold, with any sustained move below it likely to trigger further selling pressure.
Meanwhile, TSMC’s involvement presents regulatory hurdles, as the Trump administration is unlikely to approve any deal that gives a foreign company majority control over Intel’s foundries. The Biden administration’s CHIPS Act funding for Intel—which includes $1.5 billion in government subsidies—further complicates the situation, as lawmakers may be hesitant to support a deal that dilutes U.S. control over key manufacturing assets.
What’s Next for Intel?
As discussions continue, the coming months will be crucial for Intel’s future. The company needs to secure strategic partnerships to modernize its foundries while maintaining control over its U.S.-based manufacturing. A successful joint venture with TSMC could provide the technological expertise and financial backing necessary for Intel to regain its footing in the semiconductor race.
However, if negotiations stall or the deal fails to materialize, Intel’s struggles could deepen, leaving the company vulnerable to further market share losses and continued financial deterioration. Investors will be closely watching for updates on the talks, as well as Intel’s ability to stabilize its stock price and execute its long-term turnaround plan.
With the semiconductor industry at a pivotal moment, the fate of Intel’s foundry business could have far-reaching implications for the broader U.S. technology sector and America’s position in the global chip race.
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