Exclusive-TSMC pitched Intel foundry JV to Nvidia, AMD and Broadcom, sources say

By Fanny Potkin, Milana Vinn and Wen-Yee Lee

SINGAPORE/NEW YORK/TAIPEI (Reuters) – TSMC has pitched U.S. chip designers Nvidia, Superior Micro Gadgets and Broadcom about taking stakes in a three way partnership that may function Intel’s factories, in accordance with 4 sources aware of the matter.

Underneath the proposal, the Taiwanese chipmaking large would run the operations of Intel’s foundry division, which makes chips tailored for the wants of shoppers, however it might not personal greater than 50%, the sources stated. Qualcomm has additionally been pitched by TSMC, in accordance with one of many sources and a separate supply.

The talks, that are at an early stage, come after U.S. President Donald Trump’s administration requested TSMC, the world’s main contract chipmaker, help in turning across the troubled U.S. industrial icon, the sources stated on situation of anonymity as a result of the talks usually are not public.

The main points of the plan for TSMC to take not more than a 50% stake and its overtures to potential companions are being reported for the primary time.

Any remaining deal – the worth of which is unclear – would want approval from the Trump administration, which doesn’t need Intel or its foundry division to be absolutely foreign-owned, the sources stated.

Intel, TSMC, Nvidia, AMD and Qualcomm declined to remark. The White Home and Broadcom didn’t reply to requests for remark.

At stake is the way forward for the U.S. chipmaking large, whose shares have misplaced greater than half of their worth within the final 12 months.

Intel reported a 2024 web lack of $18.8 billion, its first since 1986, pushed by massive impairments. The foundry division’s property and plant gear had a guide worth of $108 billion as of December 31, in accordance with an organization submitting.

Trump is eager to revive Intel’s fortunes, as he seeks to spice up American superior manufacturing, three of the sources stated.

The sources stated TSMC’s three way partnership pitch was made to potential backers earlier than the Taiwanese chipmaker introduced with Trump on March 3 that the corporate deliberate to make a contemporary $100 billion funding in the US that includes constructing 5 further chip amenities there in coming years.

Talks concerning the three way partnership over Intel’s foundry division have since continued, the three sources stated, with TSMC trying to have a couple of chip designer as a accomplice.

A number of firms have expressed curiosity in shopping for elements of Intel, however two of the 4 sources stated the U.S. firm has rejected discussions about promoting its chip design home individually from the foundry division.

Qualcomm has exited earlier discussions to purchase all or a part of Intel, in accordance with these folks and a separate supply.

Intel board members have backed a deal and held negotiations with TSMC, whereas some executives are firmly opposed, in accordance with two sources.

Intel’s contract manufacturing enterprise, or foundry division, was a vital a part of former CEO Pat Gelsinger’s effort to avoid wasting Intel. Gelsinger was compelled out by the board in December, which named two interim co-CEOs who’ve mothballed its forthcoming AI chip.

Any offers between historic rivals TSMC and Intel would face main challenges and be expensive and laborious. The 2 firms presently use vastly totally different processes, chemical compounds, and chipmaking instrument setups at their factories, in accordance with separate sources on the firms.

Intel has beforehand had manufacturing partnerships with Taiwan’s UMC and Israel’s Tower Semiconductor that would supply a precedent for the 2 firms to function collectively, nevertheless it stays unclear how such a partnership would work concerning commerce manufacturing secrets and techniques.

The Taiwanese chipmaker desires potential buyers within the three way partnership to even be Intel superior manufacturing clients, in accordance with one of many sources.

Reuters reported final week, citing sources, that Nvidia and Broadcom are operating manufacturing checks with Intel, utilizing the corporate’s most superior manufacturing strategies, often known as 18A. AMD can also be evaluating whether or not Intel’s 18A manufacturing course of is appropriate for it.

However 18A has been an space of competition in negotiations between Intel and TSMC, two sources stated. Throughout talks in February, Intel executives advised TSMC that its superior 18A manufacturing expertise was superior to TSMC’s 2-nanometer course of, in accordance with these sources.

(Reporting by Fanny Potkin in Singapore, Milana Vinn, Anirban Sen and Karen Freifield in New York, Wen-Yee Lee in Taipei, Max A. Cherney and Stephen Nellis in San Francisco; Extra reporting by Trevor Hunnicutt in Washington; Modifying by Kenneth Li and Jamie Freed)

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