TSMC Eyes Joint Venture to Run Intel’s Foundry: A Game-Changer for U.S. Chipmaking?

TSMC is in talks to form a joint venture with Intel to operate its foundry division, attracting interest from Nvidia, AMD, and Broadcom. The deal could help revive Intel’s struggling business and strengthen U.S. chip production, but faces internal resistance and geopolitical challenges.

Taiwan Semiconductor Manufacturing Company (TSMC) is exploring a groundbreaking partnership with Intel, aiming to co-run the U.S. chipmaker’s foundry division. The proposal has drawn interest from industry giants like Nvidia, AMD, and Broadcom, signaling a major shift in semiconductor manufacturing. The potential deal could reshape Intel’s struggling foundry business and bolster U.S. semiconductor production, but challenges remain.

In a rapidly evolving semiconductor landscape, TSMC has pitched a strategic joint venture to operate Intel’s foundry division. The proposal has attracted interest from U.S. chip giants Nvidia, AMD, Broadcom, and Qualcomm, according to sources familiar with the matter. If successful, this deal could redefine global chip manufacturing, giving Intel’s struggling foundry business a much-needed boost while strengthening U.S. semiconductor production.

Intel, once a dominant force in the chip industry, has faced mounting challenges, including a staggering $18.8 billion net loss in 2024—the company’s first since 1986. Despite its ambitious plans to compete with TSMC and Samsung in the contract manufacturing space, Intel has struggled to attract major customers to its foundry services. With shares down by more than 50% over the past year, the company is at a critical crossroads.

TSMC’s proposal involves taking a minority stake in the joint venture—capped at 50%—and overseeing Intel’s foundry operations. While the Taiwanese chip giant would not fully own the division, it would play a crucial role in managing production efficiency and leveraging its expertise to enhance Intel’s manufacturing capabilities. The talks, still in early stages, have taken on heightened significance amid the Biden administration’s push for greater domestic semiconductor production. The White House has made clear that any agreement must ensure Intel remains majority U.S.-owned, reflecting broader national security concerns around America’s chip supply chain.

While Intel’s board has entertained discussions with TSMC, the company remains divided on the deal. Some executives reportedly oppose the idea, concerned about Intel’s long-term independence and trade secrets. Additionally, integrating TSMC’s and Intel’s vastly different chipmaking processes presents significant logistical and technical hurdles. Another major sticking point is Intel’s new 18A process, its most advanced semiconductor manufacturing technology. Intel executives have asserted that 18A is superior to TSMC’s upcoming 2-nanometer node, raising questions about whether Intel should be handing over its cutting-edge processes to a historical competitor.

The semiconductor industry is in the midst of a seismic shift. Nvidia, Broadcom, and AMD—companies traditionally relying on TSMC’s production—are now exploring alternative options, including Intel’s foundry services. If TSMC succeeds in bringing these companies into the joint venture, it could cement Intel’s position as a major contract manufacturer and potentially challenge Samsung’s dominance in the space. Meanwhile, geopolitical tensions loom large over the discussions. The U.S. government has ramped efforts to reduce reliance on Asian chip suppliers, committing billions in subsidies through the CHIPS Act to bolster domestic manufacturing. TSMC, already investing $100 billion in U.S. facilities, is strategically positioning itself within this framework.

While the joint venture remains in early negotiations, the outcome could have profound implications for the future of Intel, TSMC, and the broader semiconductor industry. If the deal moves forward, it could provide a path for Intel to recover lost ground while strengthening the U.S. chipmaking sector. However, with internal resistance and geopolitical concerns at play, the road ahead is anything but smooth.