It’s the transport narrative that simply won’t death, so here’s the latest bend in the almost fanfic combination of Intel and TSMC. The two organizations have apparently inked a “preliminary” contract for a joint venture to manage the latter’s device production factories, otherwise known as fabs.
We’ve been here before, with an original rumour to this result, followed by stories that to join in the joint-venture group. This latest story surfaced on The Information ( paywalled, via ) and, for now, it’s unclear if those other companies are involved.
This time, however, the talks have progressed to that “preliminary agreement” with TSMC reportedly taking a 20 % stake in Intel’s fabs as part of the deal. Reuters says both Intel and TSMC have declined to comment on the account.
Research has been made to,” Intel and additional U. S. device companies” holding a majority stake the fresh company formed from what is already Intel Foundry, but it’s all more impenetrable. For now, therefore, this remains securely a speculation, if a prolonged one.
But, what to make of it? Second, if true it probably doesn’t commit either side to seeing the offer through. Second, also, there are too few information to draw some conclusions.
We don’t understand, for example, to what degree TSMC will move its arms up and put itself into the running of Intel’s fabs. TSMC has clearly a better new track history when it comes to operating device companies. But it can scarcely just move up and say, “press that, craft that, sorted”!
Chip production is fiendishly difficult and it would probably take years for TSMC to transform Intel’s course. The details of Intel’s fresh 18A approach, for instance, are basically a done deal. It’s a bit like Nvidia taking over AMD’s Radeon design department. The innovative RX 9070 is a done deal and it would be years before the effect of Nvidia could be seen in future Radeon GPUs.
Putting a sarcastic helmet on for a minute, this is exactly the kind of non-deal bargain you might expect from both parties in terms of buying time in this exceedingly uncertain era of geopolitics.
In that situation, TSMC wants to look like it is putting its best feet forward in terms of producing chips in the US in an effort to avoid taxes. Therefore, talk of helping Intel’s fabs looks terribly joint.
Intel, however, will want to look vigilant to traders who are very worried about the efficiency of its fabs. Thus, a “preliminary” deal with the world’s leading chip company that doesn’t completely undertake either party to anything could work for an interim period while Intel finds out if it can get the new 18A going properly.
Does the tariffs remain in place and if Intel’s 18A network be a failure, probably they see the whole thing through. But if taxes fade and / or there’s a new US administration without a price desire, and if Intel 18A is a slapper, sometimes they both slowly forget the whole thing.
It is worth noting that Intel’s casting focused Direct Connect event is happening on April 29 this year, and there’s a chance this could be where any sort of announcement may be made on any alliances and Intel Foundry changes.