- Intel Considers Divesting Manufacturing Operations Amid Struggles.
- TSMC Eyes Stake in Intel’s U.S. Manufacturing Plants.
- Intel Explores Sale Options with TSMC for Chip Production Facilities.
Intel is said to be in talks with Taiwan Semiconductor Manufacturing Company (TSMC) for the possible sale of its chip manufacturing business, as reported by Bloomberg and The New York Times. The action is supported by the Trump administration and could include Intel’s U.S. factories, with the option of including its Israeli facilities, reports CTech.
Intel’s Challenges and Change in Strategy
Intel has struggled in recent years, especially after losing opportunities in the mobile and AI spaces. Its previous CEO, Pat Gelsinger, who stepped down in December, had tried to remake the company as a contract manufacturer for others—something that broke with its legacy model of manufacturing chips only on its designs. Intel spent plenty on this approach, a $25 billion ramp-up of its Kiryat Gat complex in Israel and new factories throughout the U.S., subsidized by the Biden administration’s CHIPS Act incentives.
Falling Revenues and Fewer Customers
Although heavily invested in and supported by the government, Intel found it difficult to gain profitable customers for its foundry operations, causing its revenues and profits to slump. This forced Intel to consider spinning off its manufacturing segment to concentrate on developing chips and products. Interim chairman Frank Yeary has been conducting negotiations with TSMC executives on a possible deal.
Deal Structures in Consideration
Various deal structures are being discussed, according to reports:
- TSMC Controlling Stake: TSMC might buy a controlling stake in Intel’s manufacturing business, assuming operations at its U.S. factories and potentially its Israeli ones. The deal would also entail large injections of capital into Intel’s manufacturing unit.
- Full Acquisition through Joint Venture: Another alternative is a complete acquisition through a joint venture involving significant investment companies and tech giants like Nvidia and Apple.
These two firms are major customers of TSMC and would be advantaged by greater control of their chip supply chains and manufacturing processes.
Role of the Trump Administration in the Negotiations
The Trump administration, headed by Commerce Secretary Howard Lutnick, is actively pushing the deal. Lutnick has been in talks and regards the issue a top priority. Intel’s board initiated negotiations in late 2024 by approaching TSMC to discuss potential collaborations. In January, TSMC CEO C.C. Wei had a meeting with Lutnick and Yeary to talk about potential deal structures. Lutnick and Yeary have been in close communication ever since.
Approval Difficulties and National Security Issues
While the Trump administration has indicated that it favors the agreement, gaining total approval is uncertain. Intel is the sole American-based firm that has sophisticated chip manufacturing technology, and there are fears of a foreign company getting control of its U.S. factories. A White House official informed Bloomberg that it is hard to imagine Trump giving TSMC complete control of Intel’s U.S. factories.
Did you subscribe to our daily Newsletter?
It’s Free Click here to Subscribe!
Source: CTech
