Exclusive: TSMC pitched Intel foundry JV to Nvidia, AMD and Broadcom, sources say
SINGAPORE/NEW YORK/TAIPEI, March 12 (Reuters) - TSMC (2330.TW), opens new tab has pitched U.S. chip designers Nvidia (NVDA.O), opens new tab, Advanced Micro Devices (AMD.O), opens new tab and Broadcom (AVGO.O), opens new tab about taking stakes in a joint venture that would operate Intel's (INTC.O), opens new tab factories, according to four sources familiar with the matter.
Under the proposal, the Taiwanese chipmaking giant 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 sources said. Qualcomm (QCOM.O), opens new tab has also been pitched by TSMC, according to one of the sources and a separate source.
The talks, which are at an early stage, come after U.S. President Donald Trump 's administration requested TSMC, the world's leading contract chipmaker, assist in turning around the troubled U.S. industrial icon, the sources said on condition of anonymity because the talks are not public.
The details of the plan for TSMC to take no more than a 50% stake and its overtures to potential partners are being reported for the first time.
Any final deal - the value of which is unclear - would need approval from the Trump administration, which does not want Intel or its foundry division to be fully foreign-owned, the sources said.
Intel, TSMC, Nvidia, AMD and Qualcomm declined to comment. The White House and Broadcom did not respond to requests for comment.
At stake is the future of the U.S. chipmaking giant, whose shares have lost more than half of their value in the last year.
Intel reported a 2024 net loss of $18.8 billion, its first since 1986, driven by large impairments. The foundry division's property and plant equipment had a book value of $108 billion as of December 31, according to a company filing.
Trump is keen to revive Intel's fortunes, as he seeks to boost American advanced manufacturing, three of the sources said.
The sources said TSMC's joint venture pitch was made to potential backers before the Taiwanese chipmaker announced with Trump on March 3 that the company planned to make a fresh $100 billion investment in the United States that involves building five additional chip facilities there in coming years.
Talks about the joint venture over Intel's foundry division have since continued, the three sources said, with TSMC looking to have more than one chip designer as a partner.
Multiple companies have expressed interest in buying parts of Intel, but two of the four sources said the U.S. company has rejected discussions about selling its chip design house separately from the foundry division.
Qualcomm has exited earlier discussions to buy all or part of Intel, according to those people and a separate source.
Intel board members have backed a deal and held negotiations with TSMC, while some executives are firmly opposed, according to two sources.
Intel's contract manufacturing business, or foundry division, was a crucial part of former CEO Pat Gelsinger's effort to save Intel. Gelsinger was forced out by the board in December, which named two interim co-CEOs who have mothballed its forthcoming AI chip.
Any deals between historical rivals TSMC and Intel would face major challenges and be costly and laborious. The two companies currently use vastly different processes, chemicals, and chipmaking tool setups at their factories, according to separate sources at the companies.
Intel has previously had manufacturing partnerships with Taiwan's UMC (2303.TW), opens new tab and Israel's Tower Semiconductor (TSEM.TA), opens new tab that could offer a precedent for the two companies to operate together, but it remains unclear how such a partnership would work regarding trade manufacturing secrets.
The Taiwanese chipmaker wants potential investors in the joint venture to also be Intel advanced manufacturing customers, according to one of the sources.
Reuters reported last week, citing sources, that Nvidia and Broadcom are running manufacturing tests with Intel, using the company's most advanced production techniques, known as 18A. AMD is also evaluating whether Intel's 18A manufacturing process is suitable for it.
But 18A has been an area of contention in negotiations between Intel and TSMC, two sources said. During talks in February, Intel executives told TSMC that its advanced 18A manufacturing technology was superior to TSMC's 2-nanometer process, according to those sources.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
31 minutes ago
- Reuters
Dollar slides on easing trade tensions, Fed expectations
SINGAPORE, June 12 (Reuters) - The dollar slid on Thursday on further signs that U.S. President Donald Trump may adopt a softer stance in tariff negotiations and heightened expectations of Federal Reserve rate cuts. Trump said on Wednesday he would be willing to extend a July 8 deadline for completing trade talks with countries before higher U.S. tariffs are imposed. U.S. Treasury Secretary Scott Bessent suggested earlier that the Trump administration may offer extensions from a July trade deal deadline for countries negotiating in good faith. The remarks renewed dollar weakness, lifting the euro to a seven-week high. It last bought $1.1525. The greenback lost 0.43% against the yen and 0.34% against the Swiss franc to last trade at 143.98 and 0.81725, respectively. Against a basket of currencies, the dollar fell to its weakest since April 22 at 98.327. "It's hard to tell whether there is a masterplan behind this, but common sense would suggest that President Trump is trying to create a level of urgency in terms of trade negotiations," said Rodrigo Catril, senior currency strategist at National Australia Bank. "I think the market, in terms of the size of the moves, is becoming a little bit more sanguine about what this all means... the market is also very wary that the picture could change quite dramatically in a week's time or two weeks' time." Elsewhere, sterling was up 0.38% to $1.3588. The Australian dollar ticked up 0.05% to $0.6506, while the New Zealand dollar rose 0.1% to $0.6033. On Wednesday, data showed U.S. consumer prices rose less than expected in May, leading traders to ramp up bets of a Fed cut as early as September and keeping pressure on the dollar. Thursday's producer price index data will be the next test for markets. The offshore yuan was last a touch stronger at 7.1953 per dollar, helped slightly by news that a fragile truce in the U.S.-China trade war was restored as both sides reached a deal following talks in London this week. "Full details have not been published, and it remains unclear if the talks brought the two largest economies closer to productive cooperation," said Mantas Vanagas, senior economist at Westpac. The euro was clinging to strong gains on Thursday, having jumped against most other currencies in the previous session. Against the yen, the common currency last stood at 165.88 having risen to its firmest since October at 166.42 on Thursday. It was up 0.13% against the Aussie , extending a 0.9% gain from Thursday, and had also touched a one-month high of 84.88 pence overnight . While there was no immediate trigger behind the moves, analysts say the euro has over the past week drawn support from hawkish European Central Bank (ECB) rhetoric. Last week, the ECB cut interest rates as expected but hinted at a pause in its year-long easing cycle after inflation finally returned to its 2% target. "Expectations of fewer previously expected ECB rate cuts have lent some support to the euro," said Carol Kong, a currency strategist at Commonwealth Bank of Australia. That contrasts with the likely resumption of a Fed easing cycle later this year, and as Trump has repeatedly called for U.S. rates to be lowered. Trump said last week that a decision on the next Fed chief will be coming soon, adding that a good Fed chair would lower interest rates. The euro has risen nearly 11% for the year thus far, helped in part by a weaker dollar and as investors pour money into European markets in a move away from the U.S.
BBC News
an hour ago
- BBC News
Trump claims rare earths deal 'done' with China
When Trump announced sweeping tariffs on imports from a number of countries earlier this year, China was the hardest hit. China responded with its own higher rates on US imports, triggering further tit-for-tat increases. In May, talks held in Switzerland led to a temporary truce that Trump called a "total reset". It brought Trump's new US tariffs on Chinese products down from 145% to 30%, while Beijing slashed levies on US imports to 10% and promised to lift barriers on critical mineral exports. It gave both sides a 90-day deadline to try to reach a trade deal. But the US and China subsequently claimed breaches on non-tariff pledges. In his social media post, Trump said the US would have tariffs on Chinese goods of 55%, but officials said the figure included tariffs put in place during his first term. Markets showed little response to the deal, which Terry Haines, founder of the Washington-based consultancy Pangaea Policy, described as having both "very limited scope and unfinished status". "Setting the Geneva 'pause' back on track is the smallest of accomplishments, and doesn't suggest that a broad US-China trade deal or geopolitical rapprochement is any closer in the foreseeable future," he wrote.
Reuters
an hour ago
- Reuters
Oil prices tick up on worries of escalating US-Iran tension
June 12 (Reuters) - Oil prices edged higher on Thursday to their highest in more than two months, after U.S. President Donald Trump said U.S. personnel were being moved out of the Middle East, which raised fear that escalating tensions with Iran could disrupt supply. Brent crude futures rose 15 cents, 0.2%, to $69.92 a barrel at 1230 am GMT, while U.S. West Texas Intermediate crude 22 cents, 0.3%, to $68.37. Both Brent and WTI surged more than 4% to their highest since early April on Wednesday. Trump on Wednesday said U.S. personnel were being moved out of the Middle East because "it could be a dangerous place," adding that the United States would not allow Iran to have a nuclear weapon. Reuters reported earlier on Wednesday that the U.S. is preparing a partial evacuation of its Iraqi embassy and will allow military dependents to leave locations around the Middle East due to heightened security risks in the region, according to U.S. and Iraqi sources. Iraq is OPEC's No. 2 crude producer after Saudi Arabia. A U.S. official said military dependents could also leave Bahrain. Meanwhile, Iran's Minister of Defense Aziz Nasirzadeh said Tehran will strike U.S. bases in the region if nuclear talks fail and conflict arises with Washington. Trump has repeatedly threatened Iran with bombing if it does not reach a new nuclear deal. Optimism around a trade deal between the U.S. and China, which could boost energy demand in the world's two biggest economies, also buoyed oil prices. In the U.S., crude inventories fell by 3.6 million barrels to 432.4 million barrels last week, the Energy Information Administration said. Analysts polled by Reuters had expected a draw of 2 million barrels.
