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Intel Corporation and Taiwan Semiconductor Manufacturing Company (TSMC) have reportedly reached a preliminary agreement to establish a joint venture aimed at operating Intel’s semiconductor fabrication facilities in the United States.
According to a report from The Information, TSMC will take a 20% stake in the new venture. Rather than contributing cash, TSMC will offer its expertise in semiconductor manufacturing, including sharing its advanced chipmaking practices and training Intel employees.
The reported agreement has received alleged support from both the White House and U.S. Department of Commerce wings. The United States government appears determined to pursue this agreement because officials want to strengthen Intel’s operations that have faced various performance challenges including product delays and manufacturing issues and economic hardships.
Intel selected Lip-Bu Tan as its new Chief Executive while considering potential collaboration with Taiwan Semiconductor Manufacturing Company. A net loss of $18.8 billion in 2024 along with the company’s first annual loss since 1986 has prompted Intel to implement this move as part of its broader restructuring initiatives.
The distribution plan for the remaining 80% of the joint venture remains undefined. Sources revealed TSMC engaged key fabless chip producers including Nvidia, AMD, Broadcom and Qualcomm for investment in the venture yet all the companies rejected participation.
Intel’s existing U.S. fabs present challenges for TSMC because these facilities were built to produce chips using proprietary Intel technologies, including Intel 3, 4, and 18A. These fabrication facilities, worth tens of billions of dollars, currently lack the capacity to serve clients outside their operations.
The reported agreement emerges as TSMC accelerates its expansion throughout the United States. TSMC announced its $100 billion investment to establish five more chip production facilities in the U.S. simultaneously with its $165 million investment in Fab 21 in Arizona.
Intel stock prices rose by 7% after the reported joint venture announcement attempted to restore some of its earlier year losses. Market participants showed hesitation about TSMC’s U.S.-listed stocks, which dropped by about 6% after the reported joint venture announcement with Intel.
The companies have refused to provide statements about this topic because of their active quiet periods. The White House has not provided any official declaration regarding this matter according to available reports. Further details are expected in the coming weeks.
