Taiwan Semiconductor Manufacturing Co (TSMC) is reported to have reached out to US chip designers Nvidia, Advanced Micro Devices and Broadcom about taking stakes in a joint venture that would operate struggling chipmaker Intel’s factories.
Under TSMC’s proposal, the Taiwanese chipmaker will operate Intel’s foundry division, but would not own more than 50%, reported Reuters.
TSMC wants potential investors in the JV to be customers of Intel’s manufacturing facilities.
If TSMC’s proposal does proceed as planned, Samsung’s foundry business could be in “serious jeopardy”, industry experts have warned.
Samsung’s foundry business could face challenges if its rivals collaborate to secure orders and then distribute them among themselves.
“If this plan materializes, it would be one of Samsung’s worst-case scenarios, especially as its foundry business continues to generate losses,” an industry official said, according to The Korea Herald.
Samsung Electronics is the second-largest foundry after TSMC. According to TrendForce, TSMC’s market share by revenue rose to 67.1% in the fourth quarter of 2024, up 2.4 percentage points from the previous quarter. Samsung’s share fell from 9.1% to 8.1% during the same period.
The total revenue of the world’s top 10 foundry companies reached $38.4 billion (A$61.1 billion) in the fourth quarter, a 9.9% quarter-on-quarter increase.
TSMC produces about 90% of the world’s most advanced chips with clients including Apple and Nvidia.
In Q4 2024, Samsung’s foundry division posted an operating loss exceeding 2 trillion won (A$2.23 billion).
Construction of Samsung Electronics’ first chip manufacturing plant in Taylor, Texas, was 99.6% complete as of the end of 2024, and it is expected to become operational this year.
Earlier this month, TSMC said that it is planning a fresh $159.11 billion investment in the US to build five additional chip facilities there in the coming years.
Construction on its first Arizona plant was delayed, but the facility began chip production last year, though at a higher cost than at its facilities in Taiwan.
