Analysts Call Intel a “Sinking Ship” as Broadcom and TSMC Consider Taking Over Its Chip-Design and Factory Businesses, Splitting the Company in Two

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By Tsing Mui

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Image: Intel

Intel, the multinational corporation and technology icon that dominated the CPU landscape but has fallen from grace in recent times for troubles that include manufacturing issues, financial struggles, and mounting competition from industry rivals that include AMD and TSMC, may split into two companies in the not-very-far-off future, according to a new report that discusses how Broadcom and TSMC have been eyeing potential deals for some of the company’s biggest departments and assets.

“Broadcom has been closely examining Intel’s chip-design and marketing business,” reads a report that The Wall Street Journal published over the weekend, one that also claimed TSMC —the world’s most valuable semiconductor company—has been studying to control “some or all of Intel’s chip plants, potentially as part of an investor consortium or other structure.”

“Broadcom and TSMC aren’t working together, and all of the talks so far are preliminary and largely informal,” the publication goes on to warn, although recent activity from Intel’s interim executive chairman might suggest that the company’s leaders are open to what many would have previously called “unthinkable” deals:

“Frank Yeary has been leading the discussions with possible suitors and Trump administration officials, who are concerned about the fate of a company seen as critical to national security […],” the WSJ writes. “Yeary has been telling individuals close to him that he is most focused on maximizing value for Intel shareholders […].”

News of a potential Intel split-up comes nearly three months after the company announced that it had been awarded $7.68 billion in funding under the US CHIPS Act, an infusion designed to advance its commercial semiconductor manufacturing and advanced packaging projects in several states, including Arizona, New Mexico, Ohio and Oregon.

“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” Pat Gelsinger, who was still CEO of Intel at the time, said during that announcement on November 26. “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security. Intel is deeply committed to advancing these shared priorities as we further expand our U.S. operations over the next several years.”

Intel announced just days later that Gelsinger had retired and stepped down from the board of directors after what the company described as a distinguished 40-plus-year career.

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TSMC Will Not Take Over Intel Operations, Observers Say
TSMC is considering taking a controlling stake in Intel Foundry as urged by U.S. President Donald Trump’s administration, according to a Bloomberg report last week, citing one person close to the matter.

A few days later, the Wall Street Journal reported that Broadcom is interested in buying Intel Products if a potential investor takes over Intel Foundry.

Intel and TSMC declined to comment on the matter.

The reported plan to pair TSMC with Intel will fizzle, according to Handel Jones, CEO of International Business Strategies (IBS), which advises electronics companies and investors.

“The U.S. government wants the U.S. to have large capacity in the U.S. at under 2 nanometers, and this is appropriate. The key is the level of commitment that TSMC will make to capacity in the U.S. TSMC has no interest in the wafer-fab facilities of Intel. We talk with both companies on an almost real-time basis.”

Taking on Intel Foundry would be a “battleship anchor” on TSMC’s bottom line, TechInsights vice chair Dan Hutcheson told EE Times.

“There is no reason for TSMC to help Intel, other than the uncertainty around President Trump’s ask. Intel can manage its own fabs, and 18A is coming along nicely. What Intel needs is to fill its fabs.”


There is no chance of an agreement, Hutcheson said.

“It’s only good in the interest of Intel’s self-inflicted financial situation. It hurts America’s national-security interests. It is not in TSMC’s interests. Why save your drowning chief competitor when you’ll have a monopoly once they’re gone?”

Paul Triolo, who advises global tech clients at Washington, D.C.-based Albright Stonebridge Group, said: TSMC had to acquiesce to Washington before when it stopped selling chips to China’s Huawei, agreed to build fabs in Arizona and now considers helping Intel.

“TSMC is in the most delicate of geopolitical positions and has to answer the phone when Washington calls, however bad the request could be.”

“Who decides which customers use which foundry services? This is not a simple question, as it would involve a lot more collaboration between Intel, TSMC and leading design houses. Trump administration officials have not had enough time to look at the issue in sufficient depth, and this effort is very preliminary.”

The Trump administration’s overarching aim is for more U.S. investment from TSMC, according to C.Y. Huang, president of FCC Partners, an investment bank based in Taiwan.

The administration will urge TSMC to increase its currently planned $65 billion investment in two fabs in Arizona to at least $200 billion and five fabs, Huang said in a post on LinkedIn. That would include a push for TSMC to move its CoWoS advanced-packaging technology to the U.S., he added. In Taiwan, TSMC uses CoWoS to make AI chips for Nvidia and a handful of other chip designers.

https://www.eetimes.com/tsmc-will-not-take-over-intel-operations-observers-say/

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In a new report from UDN, we're hearing that the supply chain and foreign media are reporting that the main goal of the Trump administration is to increase Intel's wafer manufacturing capacity through TSMC in order to strengthen "Made in America" from President Trump.

The US hopes to see TSMC holding a 20% stake in IFS (Intel Foundry Services) through a technology valuation or an actual cash investment.

details regarding the form of investment and related amounts have not been finalized.

Read more: https://www.tweaktown.com/news/1033...ith-qualcomm-and-broadcom-chipping/index.html

Sources indicate that Broadcom has been closely assessing Intel’s chip design and marketing businesses.

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Tsing Mui
News poster at The FPS Review.

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