Intel Teams Up With TSMC to Make Processors

The long-running saga of Intel’s foundry woes opened a hopeful chapter this week with the news that Intel and its partner/ rival TSMC will join forces to create a new venture. That entity will run Intel’s fabrication plants. Intel’s efforts to revive its chip manufacturing business to its former glory have met with challenges, including the sudden departure of the company’s CEO last year. Now, with CEO Lip-Bu Tan piloting Intel and promising to focus on its engineering talent (more than, perhaps, its manufacturing capabilities), a solution appears to be taking shape.
As Reuters points out, the venture between Intel and TSMC is a preliminary one. Earlier in the year, the White House pressured Taiwan-based TSMC (the world’s top chipmaker) to expand its manufacturing capabilities on US soil. The company already has a fab (Fab 21) in Arizona, but constructing a fabrication plant is a herculean task that takes years and billions of dollars. The White House has threatened tariffs on semiconductors, but so far has kept them out of recent tariff implementations, possibly because moving manufacturing to the US is such a slow proposition.
Now, with Intel’s foundry struggling and its CEO focused on Intel being an engineering company, TSMC has a chance to get into already-running fabs in the US. The Reuters report indicates that TSMC would get 20% of the new entity. That’s a significant stake in the new company. The details of how TSMC will be involved haven’t been revealed at this point, though it is clear that TSMC would likely help run the fabs.
The timing of this announcement is a little surprising. Intel is on the cusp of delivering its 18A chips, on which the former CEO, Pat Gelsinger, famously said he was betting the company. The company hit a manufacturing milestone recently and expects to ramp up production in the second half of 2025, with chips arriving in 2026. The process includes new technologies, including gate-all-around (GAA) transistors and a backside power delivery network (BPDN) that could make 18A a formidable rival to TSMC’s tech. It’s not clear that the new node would allow Intel to pull itself up by its bootstraps, but it seems likely that the US has more options to help Intel regain its standing than bringing in TSMC.
Another question raised by this joint Intel-TSMC venture is whether TSMC can make any real difference in Intel’s fortunes in the near future. Taking control of the fabs and redirecting their operation seems like a massive task that could take time. It will be interesting to learn more about what Intel and TSMC have in mind as this new venture takes shape.
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