Investing.com– TSMC pitched a deal to chipmakers Nvidia (NASDAQ:), AMD (NASDAQ:), and Broadcom (NASDAQ:) over forming a joint venture to operate Intel’s foundry business in the U.S., Reuters reported on Wednesday, with Qualcomm (NASDAQ:) also being approached.
Under the proposal, TSMC (NYSE:) will operate Intel’s factories but will not own more than 50% of the JV, the Reuters report said, citing four sources with knowledge of the matter.
Talks are in an early stage after initial reports that President Donald Trump’s administration approached TSMC to help rescue Intel (NASDAQ:), which is struggling with weak sales and a loss-making foundry division. Intel was also seen earlier considering a spin-off of its foundry unit.
Any deal will still require approval from Trump, who has signaled discomfort with Intel’s U.S. factories being owned by a foreign entity. TSMC’s 50% stake would accommodate for this, with the remainder of the JV operators all being U.S.-based.
The potential JV comes amid increasing global demand for data center and artificial intelligence infrastructure, with adoption of AI technology expected to ramp up in the coming months.
Any JV would also be in line with TSMC’s pledge to invest more in U.S. chipmaking facilities. The world’s largest contract chipmaker had earlier in March announced a fresh $100 billion investment in the U.S., in addition to its ongoing development in Arizona.
Broadcom and TSMC were first seen expressing interest in some of Intel’s operations, although no formal approach was made.
Intel and TSMC have been historic rivals in the foundry business, although the Taiwanese firm largely overtook Intel in recent years with its more competitive and advanced chipmaking capabilities.
Intel also largely lagged TSMC in capitalizing on heightened AI-driven demand over the past two years.
Reuters reported last week that Nvidia and Broadcom were running tests with Intel in using the company’s most advanced production techniques. AMD was also seen evaluating whether it could adopt the technique.
