BUSINESS OPERATIONS Will Broadcom and TSMC break up Intel’s business?

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The semiconductor industry may be heading for a major shake-up. Broadcom and TSMC are exploring separate deals that would effectively split Intel into two parts — one focused on chip design and marketing, the other on manufacturing.

Broadcom is reportedly interested in Intel’s design and marketing division, while Taiwan Semiconductor Manufacturing Co. (TSMC) is considering acquiring its fabrication plants. The move comes as Intel struggles financially and faces leadership uncertainty, as well as growing pressure from U.S. regulators.

Broadcom’s interest in Intel’s chip design business

Broadcom, a major player in the semiconductor industry, has a history of acquiring companies to expand its reach. If it acquires Intel’s chip design division, it would gain access to Intel’s x86 architecture expertise, adding to its existing portfolio, which includes Arm-based technologies. This could allow Broadcom to compete more directly with AMD, Nvidia, and Qualcomm in the data center and AI chip markets.

Broadcom’s strategy has typically avoided the expensive and complex business of chip manufacturing. Instead, it focuses on high-margin, fabless semiconductor design. By offloading manufacturing responsibilities to TSMC or another foundry, Broadcom could maximize the value of Intel’s design assets without the capital burden of running fabrication plants. However, any deal would face regulatory scrutiny, particularly over concerns that Broadcom’s growing influence in the semiconductor market could limit competition.

TSMC’s potential takeover of Intel’s fabs

TSMC, the world’s largest contract chip manufacturer, is reportedly looking at Intel’s fabrication plants, which could strengthen its global production capacity. Intel has struggled to compete with TSMC’s advanced manufacturing processes, particularly in smaller nodes. If TSMC takes over Intel’s fabs, it could increase efficiency and output, potentially reducing its dependence on facilities in Taiwan.

However, U.S. regulators have expressed concerns about foreign ownership of Intel’s domestic chip plants. The Trump administration has indicated it would oppose TSMC controlling Intel’s U.S. fabs, citing national security risks. Intel’s fabs are also eligible for nearly $8 billion in CHIPS Act subsidies, but those funds require majority U.S. ownership. If TSMC moves forward with an acquisition, it may need to structure the deal in a way that satisfies regulatory requirements — possibly by forming a U.S.-led consortium.

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Intel’s decline and the broader industry impact

Intel has been losing ground to competitors for years. Its foundry division alone lost $13.4 billion in 2024, and overall revenue has dropped amid stiff competition from AMD and Nvidia. Cost-cutting efforts, including layoffs and reduced R&D investment, haven’t reversed the trend. The company has also faced leadership turmoil. Former CEO Pat Gelsinger resigned in late 2024, and interim chairman Frank Yeary is now focused on boosting stock value rather than long-term operational strategy. Intel’s board is open to selling off assets, including its programmable chip unit Altera, which signals deeper financial distress.

If the Broadcom-TSMC split happens, Intel would resemble AMD, which spun off its foundry business into GlobalFoundries in 2008. Broadcom would strengthen its position in chip design, while TSMC would expand its manufacturing dominance. But breaking up Intel also risks further weakening the company’s ability to innovate, as its integrated design and manufacturing approach has historically been a strength.

Regulatory barriers could still block the deal, particularly given the U.S. government’s stance on keeping chip manufacturing under domestic control. If the deal collapses, other suitors — such as private equity firms or U.S.-led consortiums — may step in to acquire parts of Intel. The situation remains fluid, and any outcome will have major implications for the semiconductor industry, U.S.-Taiwan relations, and the broader tech supply chain.

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