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Intel and TSMC Join Forces in Strategic Chipmaking Venture

Prime Highlights:

  • Intel and TSMC have tentatively agreed to establish a joint venture to operate Intel chip plants.
  • TSMC will take 20% ownership in the new firm.

Key Facts:

  • The U.S. government has been nudging this union as a bid to increase semiconductor capability domestically.
  • Intel posted a net loss of $18.8 billion in 1986, its first-ever annual net loss, in the year 2024.

Key Background

Intel, the biggest U.S.-based chipmaker, hasn’t been doing great over the last two years. The firm couldn’t keep pace in the rapidly growing AI-powered semiconductor sector and incurred massive financial losses. Intel recorded a net loss of $18.8 billion in 2024, its first-ever annual net loss in nearly four decades. To address such problems, the firm appointed industry veteran Lip-Bu Tan as its new CEO in March 2025.

While this has been taking place, Taiwan Semiconductor Manufacturing Company (TSMC), the global leading contract chipmaker, has been expanding its operations anywhere in the world. TSMC recently announced a $100 billion spending plan to be used in building five additional chip factories in the U.S. This is just one piece of greater attempts at expanding semiconductor output outside of Taiwan and enhancing supply chain resilience.

The US government has been attempting to find partnerships that will increase the regional production of semiconductors. Commerce Department and White House officials have been at the forefront in trying to negotiate with Intel and TSMC. The hope is to address Intel’s steady manufacturing challenge and keep America competitive in the world’s semiconductor market.

In this proposal, Intel and TSMC agreed individually to construct a joint venture under a preliminary agreement. The agreement will allow TSMC to own a 20% share of a new company that will run Intel’s chip-making factories. Through the state-of-the-art manufacturing from TSMC, the venture will allow Intel to reclaim its manufacturing capability and competitiveness in the chip sector.

This planned partnership is a strategic move in addressing Intel’s chip-making problems and safeguarding the US semiconductor supply chain. The partnership will marry Intel’s design strength with TSMC’s manufacturing strength and has the ability to reverse the world’s semiconductor market competition script.

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