By Mark LaPedus
In a major move, Intel and TSMC have reached a preliminary agreement to form a joint fab venture, according to The Information, a news site.
The joint venture would operate Intel’s fabs, according to the report. Taiwan’s TSMC, the world's largest foundry vendor, will take a 20% stake in the new venture, the report said.
No other details are known about the venture. (We will update this report when more information is known.)
Nonetheless, for years, various semiconductor companies have been racing each other to develop leading-edge chips. Chips are manufactured using various process technologies in large facilities called fabs.
Intel is a supplier of microprocessors and other chips. The company produces these chips within its own fabs. And until recently, Intel was the undisputed leader in process technology.
Then, around 2017, Intel fell behind the curve. And TSMC took the lead in process technology.
Today, TSMC manufactures roughly 90% of the world’s leading-edge logic chips. TSMC produces most of its chips within its fabs in Taiwan. The rest of the leading-edge chips are produced by Samsung in South Korea.
That’s a major concern for the U.S. government. The U.S. government would like to have a U.S.-based chipmaker capable of making leading-edge chips. It’s a matter of national security. Plus, there are various geopolitical issues taking place in Asia, causing some instability in the region.
At present, Intel’s foundry unit is the only U.S.-based entity capable of producing chips at leading-edge processes. But Intel’s foundry unit is struggling and continues to lose money. The unit’s future is unclear.
For that reason, the Trump administration recently asked TSMC to buy or invest in Intel’s fabs, according to reports. The administration wants TSMC to help fix, if not save, Intel.
TSMC, according to reports, recently pitched Nvidia, AMD and Broadcom to form a joint fab venture with Intel. The venture would operate Intel's fabs.
Based on the new reports, TSMC is reportedly forming a joint fab venture with Intel. It’s unclear where the other companies stand here.
In any case, the reported Intel and TSMC joint fab venture makes little to no sense. For years, TSMC has developed its own foundry processes. In fact, TSMC is currently ramping up its most advanced process, dubbed 2nm, which is expected to appear later this year.
At the same time, Intel has also developed its own processes, which are different than TSMC’s technology. This week, Intel reached a major milestone by announcing that it has moved into “risk production” with its 18A process. 18A is Intel’s most advanced technology.
In the foundry sector, Intel’s 18A process competes with TSMC’s 2nm technology. So, if an Intel-TSMC joint fab venture happens, TSMC would more or less help Intel’s 18A—a competitive process--get off the ground.