Intel Corporation and Taiwan Semiconductor Manufacturing Co. (TSMC) have come to a preliminary agreement to establish a joint venture to run Intel’s chip manufacturing plants.
In this agreement, which was motivated by attempts to improve Intel’s position in the semiconductor industry, TSMC will acquire a 20% stake, with the majority ownership remaining with Intel and other US chipmakers. ⁽¹⁾
Details of the Joint Venture
Intel will contribute several of its existing chip foundries to the new company. The largest contract chipmaker in the world, TSMC, intends to contribute its training knowledge and chipmaking methods in addition to holding a 20% ownership, rather than giving money.
Control of the business will remain with Intel and other American semiconductor companies. Although it hasn’t been finalized yet, the agreement is a strategic partnership meant to increase Intel’s production capacity. ⁽²⁾
Why This Deal Matters
The Trump Administration initiated these negotiations to restrengthen Intel, a US icon that has faced significant challenges in recent years.
The Information notes that Intel reported a $18.8 billion net loss in 2024, its first since 1986 due to large company challenges. The company’s stock dropped 60% over the year, even as the S&P 500 rose over 23%.
The White House and Commerce Department see this partnership as a way to address Intel’s struggles, though Intel has raised concerns about potential layoffs, which could complicate the talks. ⁽³⁾
Market Reaction
Last Tuesday, Intel’s stock rose more than 4% after the report, ending the day up 2.1%, even as additional tariffs from the Trump administration caused a general market sell-off.
Earlier in the day, the stock price had increased by almost 8%. The same market turmoil, however, caused TSMC’s shares to drop by 8%. Intel’s stock has recovered somewhat in 2025, up nearly 12% year-to-date, while TSMC recently announced a $100 billion investment to build five new US chip facilities. ⁽⁴⁾
Due to current events, Intel lost its gains due to market’s continued negative reaction to Trump’s tariffs throughout the week.
What’s Next?
The deal remains tentative, with Intel and TSMC declining to comment and the White House and Commerce Department yet to respond officially.
Intel has been encountering issues, especially regarding layoffs, which could postpone or change the result. However, a successful join venture would be a significant turning point for American chipmaking and if effective, could support Intel’s operations with the help of TSMC. ⁽⁵⁾
