TSMC Proposes Joint Venture with Nvidia, AMD, and Broadcom for Intel’s Foundry Division

March 12, 2025 - In a groundbreaking move that could reshape the global semiconductor landscape, Taiwan Semiconductor Manufacturing Company (TSMC), the world's leading contract chipmaker, has pitched a joint venture to US chip giants Nvidia, AMD, and Broadcom to take over the operations of Intel's struggling foundry division. Backed by the Trump administration's push to bolster American manufacturing, this proposal aims to address Intel's financial woes while reinforcing the United States' position in the semiconductor industry. As of today, discussions remain in their early stages, with significant implications for technology, geopolitics, and market competition on the horizon.

A Strategic Proposal Amid Intel's Struggles

Intel, once a titan of the semiconductor world, has faced unprecedented challenges in recent years. In 2024, the company reported a staggering net loss of $18.8 billion-its first since 1986-driven largely by impairments in its foundry division, Intel Foundry. This unit, tasked with manufacturing chips for external customers, recorded losses exceeding $13 billion on $17.5 billion in revenue last year, despite boasting a book value of $108 billion in property and equipment as of December 31, 2024. Intel's ambitious goal to become the world's No. 2 foundry by 2030, fueled by advanced process nodes like Intel 18A and Intel 14A, has faltered under operational inefficiencies and fierce competition from TSMC, which commands roughly 90% of advanced chip production globally.

Enter TSMC with a bold solution: a joint venture that would see it manage Intel Foundry's operations while capping its ownership at no more than 50%. This structure ensures the foundry remains under US control, addressing national security concerns raised by the Trump administration, which has reportedly urged TSMC to help revive Intel. Nvidia, AMD, and Broadcom-key players in chip design and heavy TSMC customers-are being courted as partners, potentially taking stakes to influence the venture's direction. Reports also suggest Qualcomm might join, further diversifying the coalition.

The Trump Factor and US Manufacturing Ambitions

The proposal aligns with the Trump administration's "Made in America" agenda, which seeks to reduce reliance on foreign semiconductor production amid geopolitical tensions and supply chain vulnerabilities. TSMC's recent announcement on March 3, 2025, of a $100 billion investment to build five new US factories underscores its commitment to this vision. However, the White House has made it clear it is "unlikely" to support a fully foreign-operated Intel foundry, making the joint venture's balanced ownership model a critical compromise.

For TSMC, this is an opportunity to expand its US footprint without the full cost of new fab construction, leveraging Intel's existing infrastructure. For Nvidia, AMD, and Broadcom, it promises greater control over manufacturing-crucial as they rely on TSMC for cutting-edge chips like Nvidia's Blackwell GPUs on the N4P node. Intel, meanwhile, could offload a hemorrhaging division, refocus on its design strengths, and potentially secure production capacity through the venture.

Opportunities and Obstacles

The potential benefits are compelling. TSMC gains access to Intel's substantial US assets, estimated at over $100 billion, while Nvidia, AMD, and Broadcom secure supply chain stability and possibly better pricing. Intel sheds a financial burden, and the US government preserves domestic manufacturing jobs and technological leadership. Market reactions reflect optimism, with Intel's stock surging over 7% in premarket trading on March 12, 2025, and TSMC closing 1.8% higher in Taiwan.

Yet, significant hurdles loom. Integrating TSMC's process technologies (e.g., N3, N2) with Intel's (e.g., Intel 3, 18A) poses a technical challenge, as the two companies use distinct approaches-TSMC's nanosheet transistors versus Intel's gate-all-around and backside power delivery. Intellectual property conflicts could also arise, given Intel's proprietary designs and TSMC's need to protect its own innovations. Regulatory scrutiny is another concern, with the US government likely to review the deal for monopolistic risks and national security implications. Finally, the venture must prove it can turn Intel Foundry profitable, a tall order given its current less-than-1% market share compared to TSMC's dominance.

A Shifting Industry Landscape

If successful, this joint venture could redefine the semiconductor industry. TSMC's deeper US presence might pressure competitors like GlobalFoundries and UMC, while Nvidia, AMD, and Broadcom's stakes could reduce their dependence on TSMC's Taiwan-based fabs, enhancing resilience against geopolitical disruptions. For Intel, it's a chance to leverage TSMC's expertise to salvage its foundry ambitions, though it risks ceding ground in a sector it once aimed to lead.

Competitors like Samsung Electronics, already struggling in the foundry market, could face further isolation. Meanwhile, the deal's consolidation potential might spark concerns about reduced competition, especially as TSMC's AI-driven business alone is projected to outsize Intel Foundry entirely. The outcome hinges on execution-can this coalition transform Intel's underperforming assets into a competitive force?

Early Days, High Stakes

As of March 12, 2025, the talks are preliminary, with no official statements from Nvidia, AMD, Broadcom, or Intel, signaling the delicacy of negotiations. The White House and Broadcom have declined to comment, leaving the proposal's fate uncertain. Yet, the stakes are immense. Beyond financial and technological considerations, this venture carries geopolitical weight, reflecting a broader US effort to reclaim semiconductor supremacy.

In the coming months, the industry will watch closely as TSMC and its prospective partners navigate technical, regulatory, and strategic challenges. If they succeed, this could mark a turning point for Intel and a new chapter for American chipmaking. If they falter, it may underscore the difficulty of reversing decades of globalized production. For now, the semiconductor world waits-and the clock is ticking.