Broadcom is exploring the possibility of acquiring Intel's chip design and marketing unit, according to people familiar with the situation. The company has been informally discussing the possibility of making an offer, but is likely to do so only if it finds a partner to acquire Intel's manufacturing business. At the moment, Intel has not yet made an official offer, and Broadcom may decide to abandon its plans.
At the same time, TSMC is exploring options to control some or all of Intel's production facilities. This may include the formation of a consortium of investors or other structures to implement the transaction. Negotiations remain at an early stage and TSMC is not engaged with Broadcom regarding this potential acquisition.
Negotiations on a possible split of Intel have begun amid the company's difficulties, which lags behind TSMC and Samsung Electronics in the production of advanced chips. Intel is also facing competition from Advanced Micro Devices (AMD) in the CPU segment and significant losses due to untapped opportunities in the artificial intelligence boom, which is dominated by companies like NVIDIA.
Intel's market value has declined significantly in recent years, losing ground to its former competitors. However, speculation about a possible partnership with TSMC led to a sharp rise in the company's shares last week.
Intel's division into separate R&D and manufacturing units is in line with industry trends that involve specialization in one area. However, such a restructuring involves significant operational challenges. Intel's fabs are designed primarily to produce its own chips, and retooling them to meet TSMC's advanced processes will require significant engineering investments.
In addition, any deal involving TSMC would require U.S. government approval, given Intel's critical role in national security and its reliance on CHIPS Act funding. Under this program, Intel has received $7.9 billion to support new fabs in Ohio, Arizona and other states. Regulatory requirements require Intel to maintain a controlling stake in its plants if they are spun off into a separate entity.
A key challenge for TSMC could be potential restrictions on recruiting engineers to work in the US due to the Trump administration's tough immigration policy. Most of TSMC's employees come from Taiwan and other regions outside the US.
Intel has already taken a number of measures that some analysts consider to be preparations for the split. The company has begun to report separately on the results of its production facilities and plans to spin them off into a separate subsidiary with its own board of directors. This structure should attract additional investments, including funds from private investors.
Following the resignation of CEO Pat Gelsinger in December, Intel is looking for a new leader to address the challenges facing the company. The search has been going on for more than two months.
Intel's situation is reminiscent of Broadcom's attempt to acquire Qualcomm in 2017. Back then, the deal was blocked by the Trump administration due to national security concerns.
While Intel is trying to overcome the difficulties, the company's future remains uncertain. Given the interest of TSMC and Broadcom, as well as the attention of the US government, the company is facing an important moment that could change its structure and affect the entire semiconductor industry.