2 weeks Ago By Varun Godinho
Intel’s shares have risen on a report that the chipmaker has tentatively agreed to a Taiwan Semiconductor Manufacturing Co (TSMC) joint venture proposal. Intel’s shares climbed more than 2% on Thursday after the Information website reported the news. The Information noted that executives from both companies reached a preliminary agreement to form a joint venture that would run Intel’s manufacturing plants.
TSMC has reportedly discussed sharing some of its manufacturing techniques with Intel in exchange for a 20% stake in the new company. Intel and other American chipmakers will hold the majority of stock in the initiative. Concerns have been raised by some Intel executives that the deal would lead to layoffs and sideline its existing chipmaking technology.
Intel announced thousands of job cuts last year, and was hit with reports of unreliable processors, while struggling to fend off a takeover from Qualcomm. Intel Chief Executive Officer Lip-Bu Tan has previously said that the chipmaker would spin off assets that aren’t central to its operations. Media reports from last month indicated TSMC reached out to US chip designers Nvidia, Advanced Micro Devices and Broadcom about taking stakes in the joint venture that would operate Intel’s factories.
If TSMC’s proposal does proceed as planned, Samsung’s foundry business could be in “serious jeopardy”, industry experts have warned. Samsung Electronics is the second-largest foundry after TSMC. Samsung’s foundry business could face challenges if its rivals collaborate to secure orders and then distribute them among themselves.
“If this plan materialises, it would be one of Samsung’s worst-case scenarios, especially as its foundry business continues to generate losses,” an industry official said, according to The Korea Herald..
