Intel Faces Potential Split as Broadcom, TSMC Explore Deals

Intel might face a potential split as Broadcom and Taiwan Semiconductor Manufacturing Company (TSMC) explore separate deals that could divide the U.S. chipmaker, according to a recent report by WSJ.

TSMC is looking to acquire a stake in Intel’s wafer foundry services division, with Qualcomm and Broadcom also investing to enhance Intel’s manufacturing capacity. 

Broadcom has examined Intel’s chip design and marketing business and discussed a possible bid with advisers. However, the WSJ reported that the company is unlikely to proceed unless it finds a partner for Intel’s manufacturing unit.

According to the report, TSMC has systematically considered acquiring control of some or all of Intel’s chip plants, possibly through an investor consortium or another structure. The two companies are not working together, and discussions remain preliminary and informal.

Intel’s interim executive chairman, Frank Yeary, has been leading discussions with potential suitors and Trump administration officials. According to WSJ, Yeary stated that his primary focus will be maximising value for Intel shareholders.

The White House has signalled concerns over foreign control of Intel’s US factories. “The administration is unlikely to support a foreign firm operating Intel’s factories,” a White House official told Reuters. 

The official added that while the government supports foreign investment in US manufacturing, national security considerations remain a priority.

The US push to onshore chip manufacturing led by former President Joe Biden’s administration previously benefitted Intel. In November, the U.S. Commerce Department said it was finalising a $7.86 billion subsidy for the company.

Bloomberg reported that Trump’s team recently discussed a deal between TSMC and Intel, with the Taiwanese company showing receptiveness. Intel has struggled in recent years, losing contracts and facing competition from firms like NVIDIA and AMD. 

Former CEO Pat Gelsinger, who was ousted last year, had set high expectations for Intel’s manufacturing and AI capabilities but failed to meet them, leading to financial and operational challenges. In its latest earnings report, Intel posted revenue of $14.26 billion, surpassing the projected $13.81 billion. However, revenue declined 7% year-over-year, marking the third consecutive quarterly decline. The company reported a net loss of $126 million, or 3 cents per share, compared to a net income of $2.67 billion, or 63 cents per share, a year earlier.