TSMC’s Bold Play: Can Nvidia and AMD Save Intel’s Foundry Dreams?

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The semiconductor industry is on the brink of a major shake-up as Taiwan Semiconductor Manufacturing Company (TSMC) has reportedly pitched a joint venture to take over Intel’s foundry business.

The proposal, which seeks to involve major U.S. chip designers including Nvidia, AMD, and Broadcom, could mark a turning point in Intel’s struggle to reclaim its position as a manufacturing powerhouse.

According to sources familiar with the matter, TSMC would manage Intel’s foundry operations while keeping its ownership stake below 50%, ensuring compliance with U.S. regulations while maintaining strategic influence.

The initiative reportedly aligns with Washington’s push to strengthen domestic semiconductor production, a move that gained urgency amid global supply chain disruptions and increasing competition from China.

Intel’s Foundry Struggles and Industry Implications

Intel’s ambition to compete with TSMC and Samsung in the contract chip manufacturing business has faced severe challenges.

The company’s Intel Foundry Services (IFS) division, launched to compete with TSMC, has struggled with execution delays, cost overruns, and an inability to match the efficiency of its Asian rivals.

Last year, Intel posted a staggering $18.8 billion net loss, raising questions about the viability of its foundry ambitions.

The potential deal with TSMC, Nvidia, and AMD raises several critical industry questions:

• Would this signal Intel conceding defeat in chip manufacturing?
  Intel has historically prided itself on in-house chip production, but if TSMC and its partners assume control of the foundry business, it could mark Intel’s transition from a leading manufacturer to a fabless chip designer—a model followed by Nvidia and AMD.

• Why would Nvidia and AMD help a rival?
  While Nvidia and AMD compete with Intel in the CPU and GPU markets, securing more control over manufacturing capacity could give them an edge. By participating in this joint venture, they could shape Intel’s manufacturing priorities, potentially securing advanced chip production capacity for their own needs.

• How does this affect U.S. semiconductor independence?
  The Biden administration has aggressively pushed for domestic semiconductor manufacturing through the CHIPS and Science Act, aiming to reduce reliance on foreign production. While TSMC is leading the proposed venture, keeping foundry operations within Intel’s U.S. facilities could still align with Washington’s goals. However, some policymakers may view foreign involvement—especially from a Taiwanese company—with skepticism.

• Could this move counter China’s semiconductor ambitions?
  With China investing billions in developing self-sufficiency in semiconductors, a TSMC-Nvidia-AMD alliance could be seen as a strategic play to consolidate Western dominance in the chip industry. The collaboration could accelerate innovation, secure supply chains, and prevent China from gaining further ground in advanced semiconductor production.

Stock Market Reaction and Next Steps

News of the proposed joint venture sent Intel’s stock soaring, jumping 5.5% to $20.8 per share, as investors reacted positively to the potential restructuring.

Analysts suggest that if the deal materializes, it could unlock new efficiencies and help Intel shift focus to its core strengths: chip design and AI development.

The discussions, however, remain in the early stages, and regulatory scrutiny is expected. The U.S. government will likely play a key role in approving or rejecting the venture, especially given national security concerns around semiconductor manufacturing.

The Future of Intel and the Semiconductor Industry

If the deal goes through, TSMC’s involvement in Intel’s foundry operations could fundamentally alter the balance of power in the semiconductor industry.

Intel, once the undisputed leader in chip manufacturing, might be forced to accept a new reality—one where it no longer controls its own destiny.

Meanwhile, Nvidia and AMD stand to gain a significant strategic advantage, potentially securing access to advanced manufacturing capacity without direct competition from Intel’s foundry services.

As the global semiconductor battle intensifies, this proposed joint venture could be the boldest realignment yet, shaping the industry’s future for years to come.

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