Reports have emerged that Taiwan’s TSMC has proposed a joint investment in Intel’s foundry to Nvidia, AMD, Broadcom, and Qualcomm. Amidst news that the White House has urged TSMC to acquire a stake in Intel’s foundry, TSMC is seeking to share the burden with its American “allies.” As TSMC increases its investments and alliances in the U.S., concerns are rising that Samsung Electronics, struggling in the foundry sector, may become isolated.
On March 11 (local time), Reuters reported, citing sources, “TSMC has pitched U.S. chip designers Nvidia, Advanced Micro Devices and Broadcom about taking stakes in a joint venture that would operate Intel’s factories.” It added Qualcomm has also been pitched by TSMC.
Under the proposal, Reuters said, TSMC would run the operations of Intel’s foundry division, which makes chips adapted for the needs of customers, but it would not own more than 50%. “The Trump administration does not want Intel or its foundry division to be fully foreign-owned,” Reuters quoted the sources as saying.
Recently, Bloomberg reported that the Donald Trump administration had requested TSMC to acquire a controlling stake in Intel’s foundry. The intention is to provide funds to Intel’s foundry, which has fallen into a deficit due to massive investments, while also transferring operational know-how.
TSMC already faces significant investment burdens. On March 3, it announced plans to invest $100 billion over the next four years to build five additional foundries in the U.S. Adding to the existing $65 billion investment, the total U.S. investment amounts to $165 billion (approximately 240 trillion won). Thus, TSMC is seeking “allies” to share the investment.
The fact that all the partner companies TSMC is recruiting are U.S. semiconductor firms also reveals its intentions. By engaging in joint investments with the mentioned companies, TSMC can avoid criticism that Intel, a pride of the U.S. semiconductor industry, is being taken over by a Taiwanese company. These companies are all semiconductor design specialists and potential customers of Intel’s foundry, which could resolve order issues. Additionally, by lowering TSMC’s sole control and keeping the stake below 50% through the JV, it could more easily obtain merger and acquisition (M&A) approvals from various countries and maintain subsidies from the U.S. government’s semiconductor support law (CHIPS Act).
If TSMC succeeds in acquiring a stake in Intel’s foundry, Samsung Electronics, which is struggling to expand its market share in the foundry sector, may weaken further. If major design firms engage in joint investments, a decrease in Samsung Electronics’ future order volume is inevitable. According to market research firm TrendForce, TSMC recorded a global foundry market share of 67.1% in the fourth quarter of last year. Samsung Electronics’ share remained at 8.1%.
However, it is uncertain whether the companies that received the proposal will show active interest. While TSMC is under pressure from the White House, each company has little incentive to invest in Intel’s foundry, which may be a “money-eating beast” for the time being. AMD, a competitor in Intel’s CPU market, previously owned a foundry but sold it due to maintenance cost burdens.
Qualcomm, which had considered acquiring Intel entirely, reportedly withdrew from the plan. Broadcom, which showed interest in Intel’s design division, has also recently exhibited a peculiar stance. Broadcom CEO Hock Tan mentioned during a conference call following a recent earnings announcement, “We are too busy with AI and VMware to consider acquiring Intel’s design division.”
