TSMC considering running Intel's US factories after Trump team request
Trump's team raised the idea of a deal between the two firms in recent meetings with officials from TSMC, and they were receptive, Bloomberg reported, citing a person familiar with the matter.
The talks are in very early stages, and the exact structure of a potential partnership has not been established. But the expected result would have the world's largest contract chipmaker fully operating Intel's U.S. semiconductor factories, Bloomberg reported.
Such a deal could throw a financial lifeline to Intel, which has struggled to restore its lost chipmaking glory as it failed to capitalize on an AI boom and poured billions of dollars into becoming a contract chip manufacturer- a transformation that is yet to materialize.
Intel, which ceded its manufacturing technology edge to TSMC, is among a few chipmakers that both design and manufacture semiconductors.
Intel shares fell more than 4% following the report while TSMC's U.S.-listed shares rose about 1.7%.
Former Intel CEO Pat Gelsinger, who was ousted last year, set sky-high expectations for Intel's manufacturing and AI capabilities among major clients but fell short, losing or canceling contracts, Reuters had previously reported.
Intel's shares lost about 60% of their value last year as the capital-intensive bid to bolster manufacturing - a strategy championed by Gelsinger - strained the company's cash flow and ultimately led to it cutting about 15% of its workforce.
The company has also been losing share in the personal computer chip and server central processor market to rival AMD, which now boasts a market capitalization larger than the once-dominant chipmaker.
The success of Intel's 18A chipmaking technology, slated for this year, is key to the company's manufacturing ambitions
It is unclear whether Intel is open to a transaction, according to the report.
TSMC and Intel declined to comment. The White House did not immediately respond to a Reuters request for comment.
The arrangement may involve having major American chip designers take equity stakes, along with support from the U.S. government, Bloomberg reported, adding that it meant the venture would not solely be owned by a foreign company.
Intel is among the largest beneficiaries of the United States' push to onshore critical chip manufacturing.
Officials of the previous Biden administration considered the possibility of TSMC licensing its manufacturing technology for use at Intel's facilities, Bloomberg reported.
However, TSMC was not interested in an arrangement that might benefit a competitor and Biden's team was reluctant to take an active role in deal conversations, according to the report.
