Shares of Intel (INTC) are racing 8% higher in pre-market trading Wednesday morning on reports that Taiwan Semiconductor Manufacturing (TSM) is eying a potential purchase of the chipmaker’s foundry.
Reuters reports Taiwan Semi is talking with Nvidia (NVDA), Advanced Micro Devices (AMD), and Broadcom (AVGO) about forming a joint venture to own and operate the business. Qualcomm (QCOM) has also reportedly been approached. The global foundry giant would own no more than half of the JV.
Intel entered the foundry business in 2010 in an attempt to make itself a one-stop shop for semiconductors. It had excess manufacturing capacity and saw a chance to monetize its advanced process technology that was traditionally reserved for its own central processing units (CPUs).
It was a leader at the time, ahead of even TSM, and the model also promised to diversify Intel’s revenue beyond its core PC and server markets, which faced growing competition from AMD and Arm Holdings (ARM) designs. Unfortunately, the business floundered as Intel prioritized its own products and refused to share leading-edge tech with external customers, which eroded trust.
It relaunched the initiative in 2021 and rebranded it last year as Intel Foundry with a $20 billion investment in two Arizona fabs. It has been hard going. Intel’s foundry operations lost $7 billion in 2023 and $13.4 billion in 2024.
The Reuters report notes that based on discussions with knowledgeable sources, the joint venture talks are still in early stages and may not materialize. President Trump, however, has approached TSM about helping it turn around Intel’s foundry operations.
While this is not the first time a potential deal was rumored, no value has been placed on the deal yet and Trump does not want Intel or its foundry to be foreign-owned, which explains why TSM may limit its ownership to 50% or less.
