MUMBAI: Fab mates in the making? In a twist worthy of Silicon Valley drama, Intel and Taiwan’s TSMC are reportedly close to a blockbuster chip deal with Washington pulling a few strings from the wings.
According to The Information, via Reuters, the two semiconductor giants have reached a preliminary agreement to form a joint venture that would see TSMC operate a 20 per cent stake in Intel’s U.S.-based fabs. The rest of the ownership remains under wraps, though whispers of potential investor pitches to AMD, Nvidia, Broadcom, and Qualcomm have swirled since early 2024, despite public denials by some of the players involved.
Behind the scenes, the Biden administration and the U.S. Department of Commerce are said to be stage-directing the high-stakes collaboration. With Intel’s IDM 2.0 strategy stalling and its fabs failing to fire on all cylinders, this venture appears designed to stabilise an American chip titan without handing over control to foreign ownership, something the U.S. government has firmly resisted.
The stakes are silicon-sharp. Intel has spent tens of billions of dollars on its domestic fabs, but only a select few are equipped for advanced 18A process technologies, the bedrock for Intel’s next-gen processors. The challenge? Many of these fabs are tailored for Intel’s own chips, not contract manufacturing, a space where TSMC reigns supreme.
TSMC’s planned 20 per cent stake also raises eyebrows given its existing 165 million dollars investment in Arizona’s Fab 21, which already serves top-tier clients like Apple. How the Taiwanese foundry plans to juggle its own fab expansion with the new Intel tie-up remains unclear.
Chip watchers say this uneasy alliance may be less about synergies and more about survival, with the White House acting as the matchmaker. As part of a broader push to keep chipmaking competitive and domestic, Washington seems determined to bring Intel back into the game, even if it means nudging rivals into bed together.
Adding to the plot, Intel recently brought in industry veteran Lip-Bu Tan as CEO to guide its comeback after it fumbled the AI-driven semiconductor surge. While Intel and TSMC have stayed silent on the matter so far, industry insiders suggest that this deal, if sealed, could redefine global chip geopolitics.
