TSMC and Intel Reach Preliminary Deal on Foundry Joint Venture as Chip Giants Navigate New Alliance
TSMC and Intel have entered preliminary discussions to form a joint venture that would see TSMC operate Intel's U.S. manufacturing facilities, with the Taiwanese chipmaker holding up to 20 percent and pitching Nvidia, AMD, and Broadcom as co-investors.
TSMC and Intel are negotiating a preliminary agreement to form a joint venture that would place the world’s dominant contract chipmaker in charge of operating Intel’s U.S. fabrication plants, according to multiple reports. The proposed arrangement would mark an unprecedented partnership between two historical rivals and reshape the landscape of advanced semiconductor manufacturing in the United States.
Under the terms being discussed, TSMC would acquire a stake of up to 20 percent in the joint venture, contributing technology and personnel rather than direct capital investment, according to CNBC. TSMC would run the day-to-day operations of Intel’s foundry division but would not hold a majority ownership position. The remaining stake would be distributed among other investors.
Chip Designers Courted as Co-Investors
TSMC has approached several leading U.S. chip designers about taking equity stakes in the venture, including Nvidia, AMD, Broadcom, and Qualcomm, according to the South China Morning Post. The pitch includes a stipulation that potential investors would also become customers of Intel’s advanced manufacturing capabilities, creating a built-in demand pipeline for the venture’s output.
The overtures to fabless chip designers came before TSMC’s March 3 announcement, made alongside President Trump, that the company would invest an additional $100 billion in U.S. manufacturing capacity, including five new chip fabrication facilities. Discussions have continued since that announcement, with TSMC seeking to secure more than one chip designer as a partner.
Technical and Political Hurdles
Any deal faces significant technical obstacles. TSMC and Intel employ vastly different manufacturing processes, chemical formulations, and chipmaking equipment configurations at their respective factories. Integrating operations would be both costly and time-consuming.
The political dimension adds further complexity. The Trump administration, which initially encouraged TSMC to assist in revitalizing Intel’s manufacturing operations, has indicated it does not want Intel or its foundry division to be fully foreign-owned. Any final agreement would require explicit approval from U.S. regulators.
Meanwhile, Intel’s own foundry ambitions have shown signs of stabilization under CEO Lip-Bu Tan, who took the helm in March 2025. The company’s 18A process node entered high-volume manufacturing in late 2025, and Intel Foundry now operates as a standalone business unit serving external customers including Microsoft and Amazon. Intel posted FY2025 revenue of $52.9 billion and saw its stock recover from a 2024 low of roughly $17.66 to the $44-$48 range by early 2026.
A Market TSMC Already Dominates
The negotiations unfold against the backdrop of TSMC’s near-total command of the global foundry market. The company captured 69.9 percent of the worldwide contract chipmaking market in 2025, up from 64.4 percent in 2024, generating $122.54 billion in revenue, a 36.1 percent year-over-year increase, according to the Tom’s Hardware report. Samsung Electronics, the distant second-place competitor, held just 7.2 percent market share with $12.63 billion in sales.
The concentration of advanced chipmaking capacity has become a growing concern for policymakers, particularly as geopolitical tensions in the Middle East threaten supply chains for key semiconductor materials. The proposed joint venture aligns with broader U.S. efforts to diversify domestic chip production, supported by Intel’s $7.86 billion CHIPS Act grant and $11 billion in federal loans.
Both companies have declined to comment publicly on the negotiations. Intel’s board has reportedly backed the concept, though some executives within the company remain opposed. The talks remain at an early stage, and no final agreement has been reached.