Intel May Split: TSMC and Broadcom Consider Acquiring Stakes

TSMC explores taking over Intel's U.S. semiconductor factories amid pressure from Trump administration / AFP

Intel, once a dominant force in the semiconductor industry, may be on the verge of splitting up, with both Taiwan's TSMC (Taiwan Semiconductor Manufacturing Company) and U.S. semiconductor company Broadcom reportedly looking into acquiring stakes in the company. This potential separation is being fueled by Intel's financial difficulties, the shift in the global semiconductor landscape, and rising geopolitical pressures.

As of February 15, 2025, The Wall Street Journal (WSJ) reported that Broadcom is closely examining the possibility of acquiring Intel's semiconductor design and marketing operations. While Intel has unofficially discussed the matter with advisors and potential bidders, it is widely believed that any discussions about Intel's manufacturing segment will only proceed once the company has secured a partner for this crucial area. The move could mark a new chapter for Intel, as it faces mounting challenges in the semiconductor sector.

In parallel, TSMC is considering acquiring Intel's semiconductor factories, potentially in response to increasing pressure from the Trump administration. Bloomberg reported that U.S. officials have been in talks with TSMC to discuss the possibility of the Taiwanese company either purchasing or taking over the operations of some or all of Intel's factories. The Trump administration, particularly interested in strengthening domestic semiconductor production, reportedly believes that such a deal would help ease Intel's financial troubles, while also benefiting U.S. national security interests.

The acquisition of Intel's semiconductor factories by TSMC could also help alleviate some of the mounting political concerns surrounding U.S. reliance on foreign companies for critical manufacturing. However, the situation is complex. If TSMC were to independently run Intel's U.S. factories, it could face opposition from U.S. lawmakers and regulatory bodies, as such a move might be interpreted as a transfer of important technological assets to a foreign entity.

The prospect of such a deal has sparked discussions involving several key players in the semiconductor industry. Some major U.S. semiconductor firms have expressed interest in collaborating with TSMC on acquiring Intel's shares, but the details of these potential partnerships remain unclear. Despite these developments, it’s important to note that neither Broadcom nor TSMC is currently collaborating with one another on this matter, and all discussions are still in the early stages.

Intel, once an unquestioned leader in the semiconductor market, has been struggling to maintain its position in the face of fierce competition from companies such as Nvidia, which has gained traction in the AI chip market. Intel's declining performance and increasing financial troubles have prompted it to consider drastic measures, including restructuring and leadership changes. CEO Pat Gelsinger resigned amid these difficulties, further signaling that major changes are on the horizon for the company.

While selling factories or breaking up operations might be a potential solution for Intel, any such transactions would require approval from the U.S. government. According to the Semiconductor Act passed in 2022, Intel secured a substantial $7.9 billion in federal funding to support semiconductor production in the U.S., including in Ohio and Arizona. This government backing adds another layer of complexity to any deal involving Intel's U.S. factories.

Furthermore, TSMC's potential acquisition of Intel's semiconductor facilities could lead to significant challenges, particularly with regard to intellectual property concerns and the costs involved in upgrading the facilities. Some experts have warned that such a move may be financially risky for TSMC, given the costs associated with adapting Intel's older factories for its own needs. Moreover, it has been pointed out that approximately 30% of TSMC's research and development workforce would need to relocate to the U.S. to support the operation of Intel’s factories, complicating matters further.

Intel’s state-of-the-art 1.8nm semiconductor technology also raises additional concerns. If Intel successfully produces 1.8nm chips, it could disrupt TSMC’s own 2nm technology, potentially undermining the Taiwanese company's business. As a result, TSMC's decision to pursue a deal with Intel could have far-reaching consequences for the broader semiconductor industry.

In light of these developments, Intel's future remains uncertain, with both TSMC and Broadcom weighing the risks and rewards of becoming involved in the company's transformation.