Intel (Intc) and TSMC (TSM) have reportedly reached a provisional agreement that could revitalize the wrestling foundry activities of Intel. According to the information, the two companies are agreed to form a joint venture with other American semiconductor companies that would exploit the facilities of the semiconductors of Intel.
Shares of Intel jumped on the news and climb 2.9%.
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TSMC would take a 20% interest in the new organization and Intel and the other investors would control the rest. In exchange, TSMC is said to provide Intel information about how it builds its chips and offers training aid for the staff of Intel.
The deal is not completed and it is not to say whether it actually flourishes. Former CEO of Intel Pat Gelsinger tried to make the foundry in an external manufacturer for customers who are related to TSMC (TSM). But the division is bleeding in cash and places an operational loss of $ 13.4 billion in 2024. Intel says that it does not expect that its foundry activities will even break until 2027.
TSMC is the world's largest chip maker and over the years has succeeded in surpassing Intel when it comes to advanced chip production possibilities. The company produces chips for Intel rivals, including AMD (AMD) and NVIDIA (NVDA), as well as Apple (AAPL).
Intel, for his part, says that Microsoft (MSFT) and Amazon (AMZN) will use its foundries and technologies to produce their own adapted chips. Yet that is not enough to compensate for the losses of Intel.
Shares of Intel have been no less than 50%in the last 12 months, because the company is struggling with sliding quarterly turnover.
By working together with TSMC, Intel gets a boost from one of the biggest competitors. But the Trump administration, which has encouraged the companies to move forward together, wants to strengthen the Chipman facturing capacity of the US.
Both Intel and TSMC have announced billions of dollar investments in the US and received billions from the Chips Act. But even those facilities are not enough to meet all the US chip needs.
On Monday, Intel CEO Lip-Bu Tan made his first comments such as the new chief executive of the company and said that he focuses on building Intel's Foundry Business.
“While we strengthen our Intel products, [we] His equally dedicated to building a great foundry, “he said during his keynote at Intel Vision 2025.
“The global demand for chip production is growing, and you need supply chains that are flexible, resilient and safe. Intel Foundry plays a crucial role. We will continue to promote our foundry strategy to meet our needs,” Tan added.
