Intel has reportedly sought an investment from rival chipmaker TSMC.
The conversation, first reported by The Wall Street Journal, was no doubt an awkward one considering Intel’s relationship with the Taiwanese foundry giant.
Intel’s claim to fame is that, unlike most of its competition, it designs and manufactures chips. Or at least it used to be that way. Over the past few years Intel has outsourced production of some CPUs, GPUs, and networking kit to TSMC. Chipzilla continues to make its own Xeon family of datacenter processors.
As it sent more work to TSMC, Intel also tried to create a foundry biz to compete with the Taiwanese company. That costly endeavor is yet to land a major customer, and is therefore thought to have contributed to former CEO Pat Gelsinger’s abrupt “retirement” last December.
Intel has developed and deployed a new manufacturing process, called 18A, that it will use to make some products it currently outsources to TSMC. The Panther Lake client chips Intel plans to deliver this year, and Clearwater Forest E-core Xeons due in 2026, will both use 18A.
But Intel won’t be entirely done with TSMC for a while.
We already know the company’s next-gen Nova Lake processors will use both internal and external foundry services. We also know that any of the notebook SoCs developed under a co-design initiative between Intel and Nvidia will have some TSMC silicon on board.
But Intel isn’t just trying to curb its reliance on TSMC, it’s actively trying to convince other chipmakers they will be better off using its forthcoming 14A process tech instead of asking the Taiwanese company to manufacture their chips.
Despite Intel’s ambition to compete more strongly with TSMC, the Taiwanese company may still have reason to invest in Chipzilla – if only to show that it tried to save a competitor rather than crush it.
On the other hand, even if Intel Foundry succeeds, TSMC will still be the largest chipmaker in the world, and regulators may be less inclined to scrutinize its operations.
There’s certainly precedent for an investment of this nature. You may recall back in the late ’90s when Microsoft bailed out Apple to the tune of $150 million.
The reported talks come just a day after a Bloomberg report claimed Chipzilla had approached Apple about throwing in a few bucks in exchange for some common stock.
Intel has attracted a flurry of investment over the past two months. In August, SoftBank made a $2 billion bet on the chip biz’s success. Less than a week later, Uncle Sam snapped up $11 billion worth of Intel stock, equivalent to 10 percent of the company, in exchange for $8.9 billion in CHIPS Act funding.
Nvidia is the latest tech giant to throw its weight behind Intel, plowing $5 billion into the ailing chipmaker as part of a co-design initiative that will cement Intel’s position in the datacenter while granting the GPU giant entry to the integrated graphics arena. ®