The end of an era? TSMC, Broadcom could tear apart Intel's legendary business after 57 years by separating its foundry and chip design

Date:
Sat, 22 Feb 2025 18:31:00 +0000

Description:
Broadcom and TSMC reportedly looking to chop Intel in half, with separate interests in its foundry and chip design.

FULL STORY ======================================================================Intel
is currently without a CEO and its future looks unclear TSMC and Broadcom are interested in separate areas of the chip makers business Any deal faces big hurdles - government rules, factory retooling, and political pushback

Although it debuted some super-fast AI chips in 2024 in a bid to match its rival AMD, Intel isnt the powerhouse it used to be.

While Nvidia is the second-largest company in the world (behind Apple) by market cap, worth $3.4 trillion, and AMD is in 80th place, worth $183.27 billion, Intel, currently without a CEO following Pat Gelsingers departure in December 2024 , is languishing in 173rd place at $102.18 billion - placing it between Rio Tinto and Airbnb.

This has led to all sorts of rumors surrounding Intel's future, including speculation it could merge with AMD's former foundry, GlobalFoundries , in a potential multi-billion-dollar deal. But now, perhaps the saddest news of all comes from a new Wall Street Journal report, which says Taiwan Semiconductor Manufacturing Co. (TSMC) and Broadcom are separately considering deals that could split the iconic chipmaker in half. Big hurdles to overcome

The report claims Broadcom has been "closely examining Intels chip-design and marketing business", and, according to people familiar with the matter, has, "informally discussed with its advisers making a bid but would likely only do so if it finds a partner for Intels manufacturing business, the people said.

At the same time, TSMC is considering taking control of Intels chip plants (either some or all) - a move that was apparently suggested by the Trump administration. However, the WSJ was told by a White House official that the president is unlikely to support a deal that involved a foreign entity operating Intels factories, so make of that what you will.

The WSJ stresses Broadcom and TSMC havent teamed up to carve Intel in two - these are unrelated possibilities - and all of the talks so far are preliminary and largely informal.

There are a couple of hurdles standing in the way of such a deal. The 2022 Chips Act created a $53 billion grant program to boost domestic chip production, with Intel receiving the largest share - up to $7.9 billion. As a condition of the funding, the chipmaker must retain a majority stake in its factories if they are ever spun off into a separate entity. The U.S. government would also have to approve any deal involving TSMC or other investors taking control of Intels facilities.

The WSJ also notes that any deal faces operational issues, noting Intels factories have largely been set up to produce Intel chips, and the company
has only started trying to make chips for external customers in the past few years. "Retooling Intel factories to make advanced chips TSMCs way would be a significant and costly engineering challenge," it adds. You might also like Rumor has it that Intel could merge with AMD's former foundry Intel is
looking to match AMD as it debuts super-fast AI chips Intel slams Nvidia and AMD, claims chip giants have security flaws



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Link to news story: https://www.techradar.com/pro/the-end-of-an-era-tsmc-broadcom-could-tear-apart -intels-legendary-business-after-57-years-by-separating-its-foundry-and-chip-d esign


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