- Intel is currently without a CEO and its future looks unclear
- TSMC and Broadcom are interested in separate areas of the chip maker’s 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 isn’t 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 Gelsinger’s departure in December 2024is 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, GlobalFoundriesin 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 Intel’s 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 Intel’s manufacturing business, the people said.”
At the same time, TSMC is considering taking control of Intel’s 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 Intel’s factories,” so make of that what you will.
The WSJ stresses Broadcom and TSMC haven’t 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 Intel’s facilities.
The WSJ also notes that any deal faces operational issues, noting Intel’s 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 TSMC’s way would be a significant and costly engineering challenge,” it adds.