Taiwan Semiconductor Manufacturing Company Limited (NYSE:TSM) has pitched a proposal for a joint venture to several major U.S. chip manufacturers, including Nvidia (NASDAQ:NVDA), AMD (NASDAQ:AMD), and Broadcom (NASDAQ:AVGO), to manage Intel’s (NASDAQ:INTC) foundry operations. According to sources familiar with the matter, the proposal involves TSMC managing Intel’s foundry segment, which produces customized chips for clients, with a stake of less than 50%. This is to align with U.S. government concerns regarding foreign ownership of critical technology infrastructure.
TSMC Seeks Multiple Partners for the Joint Venture
TSMC (NYSE:TSM) aims to have more than one chip designer as a partner in the joint venture. Qualcomm (NASDAQ:QCOM) was also approached as a potential participant but has since withdrawn from discussions regarding purchasing all or part of Intel’s (NASDAQ:INTC) business. Although Qualcomm initially showed interest, it decided against moving forward with the deal.
Intel, TSMC, Nvidia, AMD, and Qualcomm did not immediately comment on the matter.
Intel’s Foundry Division Struggles and U.S. Government Oversight
The proposed joint venture is part of TSMC’s efforts to assist Intel (NASDAQ:INTC) in revitalizing its foundry business, which has faced significant financial challenges. In 2024, Intel reported a net loss of $18.8 billion. The U.S. government, particularly under the Trump administration, has expressed concerns about Intel’s foundry division being owned entirely by foreign entities. Any potential deal would need approval from the government, which has shown reluctance to allow foreign control over such a critical division.
Early Confidence from Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO)
Chip designers Nvidia (NASDAQ:NVDA) and Broadcom (NASDAQ:AVGO) have already begun running manufacturing tests with Intel (NASDAQ:INTC), showcasing early confidence in Intel’s advanced production techniques. Despite being longtime competitors, any future collaboration between TSMC and Intel (NASDAQ:INTC) would be complex and costly due to differences in their chip-making tools, processes, and configurations.
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