Intel Faces Potential Breakup as TSMC and Broadcom Explore Acquisition

[AleksandarK]

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.



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[Nostras]

I'm surprised this is even happening. The events, not the acquisition. Surely Broadcom and TSMC must know that this is not going to happen as is.
Do they know something we do not?

 

[AleksandarK]

I'm surprised this is even happening. The events, not the acquisition. Surely Broadcom and TSMC must know that this is not going to happen as is.
Do they know something we do not?

Lots of industry analysts speculate that there could be a consortium for Intel fabs, where TSMC would get a seat. However, we have still not been properly informed (about US's single most important strategic manufacturing operation).

 

[dismuter]

How can they be seriously discussing TSMC buying Intel Foundry? Anybody with half a brain will see that being blocked by the government from a mile away for not just one but 2 reasons: strategic national interests, and antitrust.

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.

 

[LittleBro]

TSMC will not be allowed, Broadcom maybe. But still, isn't Intel prohibited to sell foundry part because of CHIPS Act?

 

[chstamos]

Force whoever buys intel to open up the X86-X64 standard. Monopoly averted.

 

[Chaitanya]

TSMC will not be allowed, Broadcom maybe. But still, isn't Intel prohibited to sell foundry part because of CHIPS Act?

Irreespective of Chips Act, there will be too much resistance to selling off Intel even if it means running it into ground. Just look at whats happening with US steel acquisition.

 

[kondamin]

well that would be the dumbest thing that could ever be done in the whole history of computing so it’s going to happen In this backward timeline

 

[NeonDystopia]

Regardless of the facticity of the news, Intel's foundry business, either for its long-term commercial viability or technological iterative stride, is destined to be scrapped off from its main body

 

[Denver]

Nobody wants to buy broken toys. Sorry, Intel.

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.

 

[kondamin]

Nobody wants to buy broken toys. Sorry, Intel.

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.

What ever could tsmc do with billions of dollars in fabs for pennies on the dollar

 

[AusWolf]

Extra money from selling the fabs might benefit Intel (at least in the short term), but a TSMC acquisition will definitely not happen in the current political climate.

 

[dyonoctis]

Nobody wants to buy broken toys. Sorry, Intel.

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.

Intel is using the same toys as everybody else. ASML has an actual monopoly on high-end machinery. They just have less expertise in using said machinery

 

[Dragokar]

Intel is using the same toys as everybody else. ASML has an actual monopoly on high-end machinery. They just have less expertise in using said machinery

Intel uses a LOT of proprietary stuff in the older fabs, only the newest ones are somewhat interchangeable with TSMC and ASML tech. Ofc they do use scanner from ASML, but Intel loved to do their own stuff and it was good as long as it worked.

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.

 

[Colddecked]

How can they be seriously discussing TSMC buying Intel Foundry? Anybody with half a brain will see that being blocked by the government from a mile away for not just one but 2 reasons: strategic national interests, and antitrust.

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.

I agree, it won't proceed very far. However, there needs to be some kind of overhaul over at intel. I won't be surprised when it's handed over to Musk.

 

[Daven]

These rumors are going to get more and more frequent as Intel has nothing to offer the world as a wholly intact entity under its current corporate identity.

Its time for Intel to part ways with itself and handover its assets to someone more competent…for a price of course.

 

[R0H1T]

How about AMDtel™

 

[Daven]

How about AMDtel™

You know you can't miss an opportunity to make the initials 'AI'. Therefore, it should be Advanced Intelligent Micro Devices or AIntelMD or just AIMD.

 

[A Computer Guy]

Extra money from selling the fabs might benefit Intel (at least in the short term), but a TSMC acquisition will definitely not happen in the current political climate.

Can you imagine what would happen if TSMC did get the Intel fabs and then a certain country finally takes Taiwan back thus acquiring the worlds supermajority of chipmaking capacity.

 

[Daven]

Can you imagine what would happen if TSMC did get the Intel fabs and then a certain country finally takes Taiwan back thus acquiring the worlds supermajority of chipmaking capacity.

Are you implying that a takeover of Taiwan by China means that fabs located on US soil that belong to TSMC automatically become the property of the Chinese government? I can see Intel being sold off in parts to anyone but I don't see a foreign government getting automatic control of US manufacturing facilities. I mean how would China even send government officials to take over the plants without the blessing of the US?

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.

 

[R0H1T]

The US has a lot more to lose with a direct confrontation with China, regardless of whether they take care of their concerns down South.

Can you imagine what would happen if TSMC did get the Intel fabs and then a certain country finally takes Taiwan back thus acquiring the worlds supermajority of chipmaking capacity.

Well if the US is that worried about a country maybe they should stop making so many trillions of dollars worth of products from you know here ~ TSMC/Intel wouldn't even be a blip on the radar if a real war broke out in that region! And this is why nothing would happen in the short to medium term, conversely if something were to happen US' trillions of dollars worth of (vested) interest in the middle kingdom would most likely not allow it to intervene.

 

[hsew]

I think the only way anybody is gonna buy Intel is by offering AMD $50-100B to reduce the restrictions on their x86/64 cross-licensing agreement.

 

[kondamin]

I think the only way anybody is gonna buy Intel is by offering AMD $50-100B to reduce the restrictions on their x86/64 cross-licensing agreement.

x86 doesn't hold that much value anymore, the third license holder is nowhere to be seen on the market.

 

[watzupken]

While it is true that Intel foundry is a crown jewel for US when it comes to advance chip production, it has also become an enormous burden for the country as well, especially if the government plans to put it on "life support" with taxpayers money. It could well be an "investment" with no chance of repaying because competition is not sitting there waiting for Intel to pick itself up. Hence, I think over time, the idea of Intel being protected by the government is fading fast. The only way to advert total collapse of the company (assuming not using taxpayer's money) is for someone or some group to take over it, preferably US based. The foundry wise, I think unless you are in the foundry business, otherwise, I don't see why hardware giants like Apple, Nvidia, Qualcomm, Broadcom, etc, will ever be interested in it. This is especially so because it is now a massive financial burden. Despite all the massive foundry expansion plans, the actual pickup rate is very low and it seems like Intel is still very much the main user of their foundry with the next gen CPU and GPUs rumored to be based on Intel's 18A.

 

[Timbaloo]

Can you imagine what would happen if TSMC did get the Intel fabs and then a certain country finally takes Taiwan back thus acquiring the worlds supermajority of chipmaking capacity.

Should this scenario happen, then a certain country would not produce a single wafer for a significant time in any of those fabs in Taiwan. The US knows that, Taiwan knows that, the other country knows that, other countries in other parts of the world know that.