tsmc-intel potential collaboration sends shockwaves through semiconductor industry

2025-02-17 tsmc

Hsinchu, Monday, 17 February 2025.
Intel might divide its operations, potentially allowing TSMC to manage its manufacturing segment. This move could redefine the semiconductor fabrication landscape, presenting both hurdles and opportunities for TSMC. Intel faces financial pressures, partially due to missing the AI wave, leading to a significant dip in stock prices and massive layoffs. The prospect of splitting operations has sparked acquisition interest from both TSMC and Broadcom. TSMC is rumored to take over Intel’s chip manufacturing, while Broadcom shows interest in chip design and marketing. U.S. government approval is critical, and the Trump administration’s stance on foreign ownership of Intel’s factories is uncertain. The potential deal reflects larger shifts in the global semiconductor sector, with strategic implications for Intel’s restructuring and TSMC’s expansion ambitions. The situation remains fluid, with further developments expected as parties navigate regulatory and operational complexities.

Market impact and stock reaction

The potential division of Intel’s operations has triggered significant market movements. Intel’s stock surged 22.5% in a week following rumors of the restructuring plans [1]. The company’s financial troubles stem from missing the AI revolution and operational challenges, leading to a near 60% stock decline in 2024 and approximately 15% workforce reduction [1]. TSMC’s potential involvement has drawn particular attention, as it currently dominates the foundry market with a 64.9% share [7].

Deal structure and negotiations

Reports indicate Broadcom has informally discussed acquiring Intel’s chip design and marketing operations, while TSMC is exploring control of Intel’s manufacturing facilities [2][3]. The deal might involve an investor consortium structure, with TSMC potentially managing Intel’s U.S.-based fabrication plants [2]. The Trump administration has encouraged TSMC to explore this acquisition [1][3], though formal proposals haven’t been submitted to Intel [5].

Regulatory hurdles and political considerations

The transaction faces significant regulatory challenges. A White House official indicated that President Trump would likely oppose foreign ownership of Intel’s manufacturing assets [2][6]. This stance is particularly relevant given Intel’s recent receipt of $7.86 billion in U.S. government subsidies for domestic semiconductor production [1]. The deal’s complexity is heightened by requirements under the CHIPS Act, which mandates Intel maintain majority ownership of its facilities [4].

Strategic implications and industry impact

Investment firm Baird suggests the potential split could create a new entity jointly owned by Intel and TSMC, focusing on operational and technical management [1]. This restructuring could help address Intel’s financial pressures while promoting ‘geo-dependable’ manufacturing [1]. Industry experts warn that converting Intel’s facilities to TSMC’s production methods would present significant engineering challenges and costs [4][5].

Bronnen

TSMC-Intel manufacturing shift