Intel CEO Lip-Bu Tan’s First Big Move May Be A Surprise Venture With TSMC
It's been less a month since Lip-Bu Tan took over as chief executive officer (CEO) at Intel and he might already be making some major moves. None bigger than a reported chipmaking deal with rival TSMC that would see the two chip behemoths form a joint venture. If true—and Tan did promise to focus on winning through engineering—it could signal the beginning of a tectonic shift in the status quo.
Keep your friends close and your enemies closer, right? To be fair, Intel and TSMC are not enemies, though they also don't always see eye-to-eye. When former Intel CEO Pat Gelsinger retired from the company last December, TSMC founder Morris Chang (retired as CEO in 2005 and as chairman of the board in 2018) made a comment suggesting he should have steered the company more towards AI than its foundry model.
"I don't know why Pat resigned. I don't know if his strategy was bad or if he didn't execute it well...Compared with AI, he seemed to focus more on becoming a foundry. Of course now it seems that [Gelsinger] should have focused on AI," Chang said during an event to launch his autobiography. "They currently have neither a new strategy nor a new CEO. Finding both is very difficult."
It took a few months, but Intel did find its next CEO in Tan, and his strategy as revealed in an open letter to stockholders is to complete Intel's turnaround in part by facilitating a stronger foundry model. That may include teaming up with a major rival.
Citing a pair of people who are purportedly involved in the discussion, Reuters reports (via a paywalled article in The Information) that Intel and TSMC are forming a joint chipmaking venture. It's said that TSMC will own a 20% stake in the new company. Evidently, the deal came about admist pressure White House and Commerce department officials to make it happen.
$INTC $TSM
— DonCorleone77 (@CorleoneDon77) April 3, 2025
More information:
Intel, TSMC tentatively agree to form chipmaking JV, The Information says Executives from Intel (INTC) and TSMC (TSM) recently reached a preliminary agreement to form a joint venture to operate Intel's chipmaking facilities, with TSMC… https://t.co/KjqGtlOKUZ
According to DonCorleon77 on X/Twitter, US semiconductor companies other than Intel will also be part of the deal, collectively making up the remaining 80% stake. He also says TSMC is open to sharing its chipmaking methods with Intel and training some of its engineers to pay for its stake.
That's where most of the details on the supposed joint venture end. However, previous rumors suggested that TSMC discussed a joint venture with AMD, Broadcom, and NVIDIA—all of which are fabless firms—to operate Intel's factories. Whether any or all of them are part of this deal is not known.
As to the White House's urging, it has a vested interest in propping up a major US chip maker. Domestic chip production is viewed as a key component of both economic stability and security, especially as relations with China continue to be strained (particularly as steep tariffs take hold).
Intel 18A has entered risk production 👏.
— Intel News (@intelnews) April 1, 2025
This final stage is about stress-testing volume manufacturing before scaling up to high volume in the second half of 2025. #IntelVision pic.twitter.com/SWzoZvbVO5
Intel, meanwhile, continues to make headway on its 18A process node, which just recently entered risk production. The key milestone is one of the last big steps ahead of mass production (the next one would be stress testing volume production). It also means that Panther Lake remains on track to ramp later this year, followed by Nova Lake in 2026.
As of right now, the joint venture between Intel and TSMC is not official. Even so, it will be interesting to see how the reported partnership affects share prices of both companies. To that end, shares of Intel took a hit in premarket trading after China said it planned to hit US goods with a 34% tariff, then began to rise after news of the joint venture surfaced.
