On March 12, 2025, a piece of news caused waves in the semiconductor industry, saying that TSMC is in contact with semiconductor giants such as Nvidia, AMD and Broadcom to explore joint investment in the formation of a joint venture to operate Intel's foundry division. This event not only involves the two giants of the global semiconductor industry - TSMC and Intel, but also involves important players such as Nvidia, AMD, and Broadcom, and the technology, market and strategic significance behind it are worth in-depth discussion. China Exportsemi will conduct an in-depth analysis on this matter, welcome to leave a message to discuss.
Background of the event: The plight of Intel's foundry division and TSMC's expansion ambitions
Intel's foundry division has been facing backward manufacturing processes and low yields in recent years, resulting in financial losses and dragging down Intel's performance across the company. According to sources, Intel reported a net loss of $18.8 billion in 2024, the first loss since 1986, mainly due to large asset impairments. Against this backdrop, Intel is rumored to be selling its foundry division to ease financial pressures.
As the leader of the global foundry market, TSMC has a market share of more than 50%, and its leading position in advanced process technology makes it the preferred partner of many chip design companies. However, TSMC is not satisfied with its existing market position and is actively seeking new growth points and strategic expansion. The proposal to cooperate with Nvidia, AMD, Broadcom and other companies to operate Intel's foundry division is an important step under TSMC's strategy.
Figure: TSMC approached semiconductor giants to explore joint ventures to operate Intel's foundry business
Technology Collaboration and Innovation: Intel 18A Technology Takes the Spotlight
At the heart of the negotiations is Intel's 18A process technology. Intel claims that the technology is superior to TSMC's 2nm process, and Nvidia and Broadcom are already testing the 18A process, and AMD is evaluating its suitability. If TSMC cooperates with these companies successfully, it will help TSMC form synergies with Intel in advanced process technologies and accelerate technological innovation and product iteration.
TSMC dominates the advanced chip manufacturing space, accounting for 92% of the business. However, as technology continues to advance, TSMC is also facing pressure from competitors such as Samsung. By partnering with Intel, TSMC can gain more details and experience about Intel's technology, provide reference for its own technology research and development, and further consolidate its leading position in the field of advanced processes.
Market share and competitive landscape: TSMC's market position may be further consolidated
TSMC is currently the leader in the global foundry market, with a market share of more than 50%. If it successfully operates Intel's foundry division, it will further strengthen its market position and put more pressure on other competitors such as Samsung. At the same time, if Intel's foundry department can use TSMC's management experience and customer resources, it is expected to improve its competitiveness in the foundry market and change the current market pattern.
In addition, this collaboration will have an impact on the supply chain of the entire semiconductor industry. TSMC's cooperation with companies such as Nvidia, AMD, and Broadcom will form a strong technology alliance that will further strengthen the market position of these companies in their respective fields. For example, NVIDIA, as the world's leading GPU design company, has an important position in the field of artificial intelligence and high-performance computing. By partnering with TSMC, NVIDIA can ensure that the needs of its advanced processes are met to maintain an edge in the market.
Business Strategy and Strategic Considerations: TSMC's Expansion and Intel's Transformation
From the perspective of business strategy, TSMC's move may be to expand its business layout in the United States, strengthen cooperation with local chip design companies in the United States, and further consolidate its leading position in the field of advanced processes. At the same time, by participating in the operation of Intel's foundry department, TSMC can obtain more details and experience about Intel technologies and provide reference for its own technology research and development.
For Intel, handing over the foundry division to companies such as TSMC may be a strategic adjustment in the face of declining market share and financial pressures. This will help Intel focus its resources on its core chip design business and enhance its competitiveness in areas such as CPUs. In addition, through cooperation with TSMC and others, Intel can use its advanced process technology to accelerate the upgrading of its own products.
Risks and Challenges: Technology, Intellectual Property and Policy Risks
Despite the many potential advantages of this collaboration, it also comes with its own risks and challenges. First, the negotiations involved complex technical and strategic challenges, including issues such as intellectual property protection and process differences. In the process of cooperation, how to ensure that the technology of all parties is not leaked, and how to coordinate the process technology standards of different companies are the key issues that need to be solved. Once mishandled, it may lead to technical disputes and legal proceedings, affecting the smooth progress of cooperation.
Second, regulatory and policy risks cannot be ignored. The transaction is subject to U.S. government approval due to foreign control of important U.S. semiconductor assets. At present, the U.S. government is more sensitive to the policies of the semiconductor industry, and may set high thresholds and restrictions on transactions, increasing the uncertainty and risk of transactions.
Editor's Observations and Perspectives: Industry Transformation and Future Prospects
The editor of China Exportsemi believes that in the long run, the cooperation between TSMC and Nvidia, AMD, Broadcom and other companies, if successfully implemented, will have a far-reaching impact on the global semiconductor industry. On the one hand, it will accelerate the popularization and application of advanced process technology, and promote the development of the entire industry in the direction of higher performance and lower power consumption. On the other hand, it may also intensify market competition, prompting enterprises to increase R&D investment and enhance their core competitiveness.
However, in the process of cooperation, all parties need to fully consider technology, market, policy and other factors, and properly address possible risks and challenges to achieve the goal of mutual benefit and win-win results. For Intel, this partnership may be an important attempt on its transformation path, but it will take time to test whether it can truly turn losses into profits.
Conclusion
TSMC's proposal to form a joint venture with Nvidia, AMD, and Broadcom to operate Intel's wafer foundry is an important attempt by the semiconductor industry in the context of technological competition, market expansion, and strategic adjustment. The end result will have a significant impact on the industry landscape and future development. Whether this collaboration succeeds or not, it provides a food for thought for the semiconductor industry, and it also allows us to see the innovation and transformation of the industry in a constantly changing world.
