Intel shares rose 6% in premarket trading after Reuters reported that Taiwan Semiconductor Manufacturing, or TSMC, had approached US chip designers Nvidia, Advanced Micro Devices, and Broadcom about taking stakes in a joint venture that would operate the struggling chipmaker’s factories.
Four sources told Reuters that the Taiwanese chipmaking giant would run Intel’s foundry division under the new proposal, producing chips tailored to customer requirements but not owning more than 50%. The sources added that Qualcomm has also been approached about the venture.
The sources noted that the Trump administration is exploring ways to revive Intel and strengthen US manufacturing under the ‘America First’ agenda. They added that TSMC’s joint venture pitch to chip designers took place before the company, alongside President Trump, announced plans last month to invest $100 billion in semiconductor manufacturing in the US, building on its existing $65 billion investment in its Phoenix, Arizona, factories.
Any deal between TSMC and Intel would be subjected to approval from the Trump administration, which opposes full foreign ownership of Intel or its foundry division, according to sources.
Intel shares in premarket trading were up 5.5% but flat on the year despite all the talk in corporate fin press about the one-time chip giant selling partial stakes in its foundries.
Multi-decade lows…
Last month, Robert W. Baird analysts wrote in a note to clients that the Trump administration was working to broker a joint venture between Intel and TSMC, one which would focus on something we said last August has excess value at the Intel enterprise, namely its fabs…
Intel has 15 fabs; the fabs alone are worth $10bn/each in liquidation value.
The value created by management is negative $50 billion. https://t.co/HkqUQJ4A6J
— zerohedge (@zerohedge) August 2, 2024
Reuters reported last week, citing sources, that Nvidia and Broadcom were conducting manufacturing pilot runs with Intel and evaluating whether those factories are suitable for their chips.
Reuters and other media outlets continue to speculate about a TSMC deal to save Intel after years of financial and execution struggles.
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