TSMC to Acquire 20% Stake in Intel’s Joint Venture Amid Challenges

Taiwan Semiconductor Manufacturing Co. TSM is poised to acquire a 20% stake in a new joint venture with Intel Corp INTC, which aims to tackle the chipmaker’s persistent operational difficulties, including a staggering $18.8 billion net loss reported for 2024.

Details of the Joint Venture

What Happened: Intel and TSMC have reached a preliminary agreement to establish a joint venture that will oversee Intel’s manufacturing operations, according to reports from Reuters via The Information.

As the leading contract chipmaker globally, TSMC’s involvement marks a significant development, with the company securing a 20% stake in the venture.

see also: Mark Zuckerberg-Led Meta Set To Face ‘Truth’ At Senate Hearing Over China Operations And Communist Party Censorship Efforts

Implications of the Acquisition

Why It Matters: This agreement arises amid increasing pressure from U.S. government officials—including the White House and the Commerce Department—urging both corporations to alleviate Intel’s ongoing manufacturing and customer service issues. Intel has faced significant challenges in producing chips for external clients, leading to delays and quality failures.

This year, Intel appointed industry veteran Lip-Bu Tan as CEO to lead its recovery efforts. Despite these hurdles, TSMC actively pursues expansion in the U.S., announcing a $100 billion investment in new chip facilities over the coming years.

The new CEO has been forthright about the company’s hurdles, insisting on the importance of aligning expenditures with market demands.

Subscribe to the Benzinga Tech Trends newsletter to receive the latest tech updates directly in your inbox.

Strategic Outlook and Market Reactions

It has also been noted that this joint venture could potentially attract investments from other key players in the industry, such as Nvidia Corp NVDA, Advanced Micro Devices AMD, and Broadcom Inc. AVGO. This move is part of a comprehensive strategy aimed at reversing Intel’s declining fortunes following its substantial losses this year.

Moreover, TSMC’s U.S. expansion has triggered concerns in Taiwan regarding the risks associated with such a significant overseas investment.

Current Market Performance

Price Action: Year-to-date, TSMC shares have decreased by 11.55%, while Intel has enjoyed a growth of 10.93%. However, over the last 12 months, TSMC has gained 20.31%, contrasted by a sharp 44.38% decline in Intel’s stock, as reported by Benzinga Pro.

Benzinga’s Edge Rankings indicate that Intel has a growth rating of 3.47%. If you’re interested in comparing TSMC’s performance, click here for a detailed analysis.

Photo by Sundry Photography on Shutterstock

Looking Ahead

Read Next:

Disclaimer: This content was partially produced with the aid of AI tools and was reviewed and published by Benzinga editors.