Monday, February 17th 2025
Intel Faces Potential Breakup as TSMC and Broadcom Explore Acquisition
According to sources close to the Wall Street Journal, Intel is weighing preliminary acquisition offers that could split the company into two parts: product and foundry. TSMC and Broadcom are independently exploring deals that would divide Intel's chip design and manufacturing operations. Broadcom has initiated informal discussions regarding Intel's chip design and marketing divisions, while TSMC is considering assembling an investor consortium to acquire Intel's facilities. This solution is improbable, as Intel's fabs are strategically one of the most critical aspects of the US semiconductor supply chain. Intel manufactures custom chips for the US Department of Defense; hence, having a foreign owner of fabs is not acceptable. The news about the acquisition comes as Intel grapples with manufacturing setbacks, including a total $13.4 billion loss in its foundry segment during 2024 and a significant erosion of market share in the AI processor market.
The acquisition talks face substantial regulatory hurdles, particularly regarding national security concerns. The US government has signaled resistance to foreign ownership of Intel's domestic manufacturing capabilities, which are deemed strategically vital to American technological sovereignty. This could particularly impact TSMC's bid for Intel's plants despite the Taiwanese company's position as the world's leading contract chipmaker. Intel's vulnerability to acquisition follows a series of strategic missteps under former leadership, including delayed manufacturing innovations and an increasing reliance on government subsidies for facility expansion. The company's share price has declined 60% from its 2021 highs amid these challenges, attracting potential buyers despite the complexity of any potential deal structure. Successful execution would require navigating both regulatory approval and the practical difficulties of disaggregating Intel's deeply integrated design and manufacturing operations.
Source:
via Tom's Hardware
The acquisition talks face substantial regulatory hurdles, particularly regarding national security concerns. The US government has signaled resistance to foreign ownership of Intel's domestic manufacturing capabilities, which are deemed strategically vital to American technological sovereignty. This could particularly impact TSMC's bid for Intel's plants despite the Taiwanese company's position as the world's leading contract chipmaker. Intel's vulnerability to acquisition follows a series of strategic missteps under former leadership, including delayed manufacturing innovations and an increasing reliance on government subsidies for facility expansion. The company's share price has declined 60% from its 2021 highs amid these challenges, attracting potential buyers despite the complexity of any potential deal structure. Successful execution would require navigating both regulatory approval and the practical difficulties of disaggregating Intel's deeply integrated design and manufacturing operations.
43 Comments on Intel Faces Potential Breakup as TSMC and Broadcom Explore Acquisition
Do they know something we do not?
Also, I'm not a fan of the perspective of Intel's chip design division being bought by anyone. I'm afraid of the changes that it might bring, such as the end of socketed platforms, the end of ARC before it got a real chance to disrupt the market positively.
But seriously, what is the advantage for the market leader in buying part of intel's fabs? *Unless it's to reuse equipment to expand its own production.
TSMC, as rumors from Taiwan goes, is only interested in the new fabs anyway and some others are rumored to have said no to the older 1x nm Intel Fabs (like IBM and GF).
On the plus side, if they push some tons of $$$ in it, it might be good for the US, as long as they can push the newer fabs forward.
Its time for Intel to part ways with itself and handover its assets to someone more competent…for a price of course.
There is a lot of foreign ownership of land and business in the US but most if not all of these foreign entities are on good terms with the US and have permission from the US. If China invades Taiwan, I don't see the US rolling over and throwing up their hands on TSMC owned US fabs. If anything, relations are getting worse with China because of all the tariffs.
China, from what I remember, is expanding at a faster rate than Intel/TSMC/Samsung combined although not at the leading edge right now.