WBT Industry Related Off Topic., page-1542

Exclusive-TSMC pitched Intel foundry JV toNvidia, AMD and Broadcom,

Wed12 March 2025 at 2:49 pm GMT+11 4 min read

SINGAPORE/NEW YORK/TAIPEI (Reuters)-TSMC has pitched U.S. chip designers Nvidia, Advanced Micro Devices andBroadcom about taking stakes in a joint venture that would operate Intel'sfactories, according to four sources familiar with the matter.

Under the proposal, the Taiwanesechipmaking giant would run the operations of Intel's foundry division, whichmakes chips adapted for the needs of customers, but it would not own more than50%, the sources said. Qualcomm has also been pitched by TSMC, according to oneof the sources and a separate source.

The talks, which are at an earlystage, come after U.S. President Donald Trump's administration requested TSMC,the world's leading contract chipmaker, assist in turning around the troubledU.S. industrial icon, the sources said on condition of anonymity because thetalks are not public.

The details of the plan for TSMC totake no more than a 50% stake and its overtures to potential partners are beingreported for the first time.

Any final deal - the value of whichis unclear - would need approval from the Trump administration, which does notwant Intel or its foundry division to be fully foreign-owned, the sources said.

Intel, TSMC, Nvidia, AMD andQualcomm declined to comment. The White House and Broadcom did not respond torequests for comment.

At stake is the future of the U.S.chipmaking giant, whose shares have lost more than half of their value in thelast year.

Intel reported a 2024 net loss of$18.8 billion, its first since 1986, driven by large impairments. The foundrydivision's property and plant equipment had a book value of $108 billion as ofDecember 31, according to a company filing.

Intel stock rose 6% in early U.S.trading on Wednesday, while Nvidia, AMD, Broadcom and Qualcomm were up between1.18% and 6.64%. TSMC closed about 1.8% higher in Taiwan.

Trump is keen to revive Intel'sfortunes, as he seeks to boost American advanced manufacturing, three of thesources said.

The sources said TSMC's jointventure pitch was made to potential backers before the Taiwanese chipmakerannounced with Trump on March 3 that the company planned to make a fresh $100billion investment in the United States that involves building five additionalchip facilities there in coming years.

Talks about the joint venture overIntel's foundry division have since continued, the three sources said, withTSMC looking to have more than one chip designer as a partner.

Multiple companies have expressedinterest in buying parts of Intel, but two of the four sources said the U.S.company has rejected discussions about selling its chip design house separatelyfrom the foundry division.

Qualcomm has exited earlierdiscussions to buy all or part of Intel, according to those people and aseparate source.

Intel board members have backed adeal and held negotiations with TSMC, while some executives are firmly opposed,according to two sources.

Intel's contract manufacturingbusiness, or foundry division, was a crucial part of former CEO Pat Gelsinger'seffort to save Intel. Gelsinger was forced out by the board in December, whichnamed two interim co-CEOs who have mothballed its forthcoming AI chip.

Any deals between historical rivalsTSMC and Intel would face major challenges and be costly and laborious. The twocompanies currently use vastly different processes, chemicals, and chipmakingtool setups at their factories, according to separate sources at the companies.

Intel has previously hadmanufacturing partnerships with Taiwan's UMC and Israel's Tower Semiconductorthat could offer a precedent for the two companies to operate together, but itremains unclear how such a partnership would work regarding trade manufacturingsecrets.

The Taiwanese chipmaker wantspotential investors in the joint venture to also be Intel advancedmanufacturing customers, according to one of the sources.

Reuters reported last week, citingsources, that Nvidia and Broadcom are running manufacturing tests with Intel,using the company's most advanced production techniques, known as 18A. AMD isalso evaluating whether Intel's 18A manufacturing process is suitable for it.

But 18A has been an area ofcontention in negotiations between Intel and TSMC, two sources said. Duringtalks in February, Intel executives told TSMC that its advanced 18Amanufacturing technology was superior to TSMC's 2-nanometer process, accordingto those sources.