Broadcom, TSMC size up Intel for potential deals, WSJ reports
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The news: Taiwan Semiconductor Manufacturing Co. (TSMC) and Broadcom are both weighing up a takeover of Intel businesses, a move which would divide the American chipmaker’s operations, according to sources cited by the Wall Street Journal.
The numbers: Shares in Intel closed out their best week in 25 years on Friday, rising 23.6% on the week, after Bloomberg reported that officials from the Trump administration had raised the idea of TSMC taking a controlling stake in Intel’s chip plants.
The context: The WSJ reported that the two Intel competitors are sizing up different parts of the business. Broadcom is showing interest in Intel’s chip-design and marketing divisions, having carried out informal discussions with advisors about the possibility of making a bid. Broadcom would only progress with a bid should it find a partner for Intel’s manufacturing business. TSMC is assessing Intel’s chip plants, looking to take control via an investor consortium or other structure.
The WSJ reports that the two Intel competitors are not working together and that all talks are preliminary.
Interest in Intel as an acquisition target has grown as the US firm continues to struggle against the rapid global momentum built by rival semiconductor producers during the artificial intelligence boom. Should Intel be broken up via an acquisition of this nature, the division would bring the iconic American company more in line with the shift toward companies specialising in either manufacturing or designing chips.
Intel’s previous CEO, Pat Gelsinger, had failed to turn the company around under an ambitious plan which focused on regaining Intel’s manufacturing lead from rivals like TSMC, expanding into contract chipmaking, and investing heavily in new factories. Gelsinger was ousted in December, after his tenure was marked by delays in manufacturing plans, losing ground to Nvidia in AI chips, Intel’s reliance on government subsidies to fund factory expansions, USD7 billion ($11 billion) in chipmaking losses in 2023, and a 60% decline in the value of its share price.
The sources: Wall Street Journal, Bloomberg
