Intel and Taiwan Semiconductor Manufacturing Company (TSMC) are reportedly in the early stages of forming a joint venture to operate Intel’s chip-making facilities. If finalized, the deal would see TSMC acquire a 20% stake in a new company that would run Intel’s fabs, a rare and strategic partnership between two longtime industry rivals.

A Partnership Born of Necessity

Intel has had a difficult run in recent years. While the rest of the chip industry surged forward driven by the AI boom and high-performance computing demand Intel struggled to keep up. Its ambitious plans to expand into foundry services, where it manufactures chips for other companies, faced significant setbacks. Delays, missed deadlines, and subpar client service plagued the effort, especially in comparison to TSMC, which has long set the gold standard in chip manufacturing.

These troubles culminated in a rough financial year for Intel. In 2024, the company posted its first net loss since 1986 a staggering $18.8 billion. Its stock plummeted by 60%, reflecting a loss of investor confidence, even as competitors saw gains. While Intel’s shares have recovered somewhat in early 2025, the damage has been done and it’s clear that something needs to change.

TSMC Steps In

Enter TSMC. The world’s largest contract chipmaker has been under pressure from the U.S. government to help stabilize and strengthen America’s semiconductor manufacturing capabilities. According to The Information, the White House and the Department of Commerce have been encouraging both Intel and TSMC to come to the table.

Now, the outlines of that effort are beginning to take shape. TSMC’s involvement in operating Intel’s fabs even with only a minority stake could bring much-needed operational excellence and credibility to Intel’s manufacturing arm. The hope is that this collaboration could not only improve production quality but also help win back customers that have moved to competitors in recent years.

A Wider U.S. Strategy

This joint venture also fits neatly into a broader trend: building more semiconductor production capacity on U.S. soil. TSMC recently announced a massive $100 billion investment plan in the U.S., which includes the construction of five new chip plants. These projects are part of a long-term push to localize chip manufacturing and reduce reliance on overseas production, especially as geopolitical tensions continue to simmer.

Interestingly, it was also reported that TSMC had previously approached other major chip designers, including Nvidia, AMD, and Broadcom about potentially taking stakes in a similar venture. Those discussions didn’t progress, but it shows just how active the company has been in trying to strengthen its U.S. ties.

A New Era for Intel

Intel has also seen changes at the top. In March 2024, the company brought in industry veteran and former board member Lip-Bu Tan as CEO. His appointment is widely seen as a bold move to shake up the company’s strategy and steer it back on course.

With Tan’s leadership and TSMC’s technical expertise, Intel may finally have the tools it needs to make a meaningful comeback in the global chip race. The partnership could help Intel regain its footing in advanced manufacturing, where it has fallen behind rivals like AMD and Apple, who rely heavily on TSMC’s cutting-edge process technologies.

What This Means for the Industry

If successful, this joint venture could mark a significant turning point not just for Intel, but for the entire semiconductor ecosystem. It would blend Intel’s legacy and infrastructure with TSMC’s unmatched manufacturing prowess. It could also set a precedent for more cooperative efforts in an industry that has historically been fiercely competitive.

Most importantly, it reflects a larger shift: as semiconductors become more central to everything from smartphones to AI and national defense, no single company or even country can afford to go it alone.

Final Thoughts

While Intel and TSMC haven’t officially confirmed the partnership yet, all signs point toward a serious effort to collaborate. It’s a partnership born out of urgency, shaped by global economic realities, and driven by the need to rebuild trust in American chip manufacturing.

The semiconductor industry is evolving fast and so must the players within it. For Intel, this joint venture might just be the lifeline it needs. For TSMC, it’s a bold step into new territory. And for the tech world at large, it could be the beginning of a new era of collaboration over competition.