Taiwan Semiconductor Mfg. Co. Ltd. (NYSE:TSM) has reportedly approached U.S. chip designers Nvidia Corp. (NASDAQ:NVDA), Advanced Micro Devices (NASDAQ:AMD) and Broadcom Inc. (NASDAQ:AVGO) to invest in a joint venture (JV).
What Happened: With the joint venture, TSMC aims to operate Intel Corp.'s (NASDAQ:INTC) factories, according to a report by Reuters.
The proposal suggests that the Taiwanese chipmaker would manage Intel’s foundry division, which customizes chips for clients, but would not own more than 50%, according to sources in the report.
TSMC has also approached Qualcomm Inc. (NASDAQ:QCOM) for this JV, the report added.
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The discussions are in early stages and follow a request from the Trump administration for TSMC to aid in revitalizing Intel, a key U.S. industrial entity. The plan details and TSMC’s outreach to potential partners are being reported for the first time.
Any agreement would require approval from the Trump administration, which opposes full foreign ownership of Intel or its foundry division
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Intel’s shares have plummeted over 56% in the past year, and the company reported a net loss of $18.8 billion in 2024. The foundry division’s assets were valued at $108 billion as of December 31, according to a company filing.
Why It Matters: The proposal from TSMC comes at a time when the company is experiencing significant growth, driven by a surge in demand for its chips used in artificial intelligence applications.
In the first two months of 2025, TSMC reported a 39.2% increase in revenue, highlighting the robust demand for its products.
This growth is part of a broader trend, as TSMC’s CEO, C. C. Wei, emphasised that their U.S. expansion is driven by the booming AI and smartphone markets, not political pressure.
This expansion includes a $100 billion investment plan to meet the rising demand from U.S. customers.
Additionally, Meta Platforms Inc. (NASDAQ:META) has partnered with TSMC to produce its first in-house AI chip, aiming to reduce dependence on suppliers like Nvidia.
This move underscores the growing importance of TSMC in the AI chip market. Meanwhile, Broadcom‘s CEO, Hock Tan, has dismissed speculation about a potential merger with Intel.
Benzinga has reached out to TSMC, Nvidia, Intel, Broadcom and Qualcomm for comments. This story will be updated as and when they respond.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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