TSMC Steps Up To Take 20% Stake In Joint Venture With Intel As Struggling Chipmaker Grapples With Nearly $19 Billion Losses In 2024: Report - Broadcom (NASDAQ:AVGO), Advanced Micro Devices (NASDAQ:AMD)

Taiwan Semiconductor Manufacturing Co. TSM is reportedly set to acquire a 20% stake in a new joint venture with Intel Corp INTC, aimed at addressing the U.S. chipmaker’s ongoing struggles, including its $18.8 billion net loss in 2024.

What Happened: Intel and TSMC have reached a preliminary agreement to form a joint venture that will take over the operations of Intel’s manufacturing facilities, reported Reuters via The Information.

TSMC, the world’s largest contract chipmaker, will hold a 20% stake in the new venture, the report noted.

See Also: Mark Zuckerberg-Led Meta Set To Face ‘Truth’ At Senate Hearing Over China Operations And Communist Party Censorship Efforts

Why It Matters: The deal comes amid pressure from U.S. government officials, including the White House and the Commerce Department, who have pushed both companies to resolve Intel’s ongoing manufacturing and customer service challenges. Intel has struggled to manufacture chips for external clients, which has led to delays and failed tests.

Earlier this year, Intel appointed chip industry veteran Lip-Bu Tan as its CEO to spearhead its revival efforts. Despite these challenges, TSMC has been active in the U.S., with plans for a $100 billion investment in new chip facilities over the next few years.

The new CEO has been candid about the company’s challenges, emphasizing the need to align spending with market demand.

Subscribe to the Benzinga Tech Trends newsletter to get all the latest tech developments delivered to your inbox.

Previously, it was reported that the joint venture, which could see other companies like Nvidia Corp NVDA, Advanced Micro Devices AMD, and Broadcom Inc. AVGO take stakes, is part of a broader strategy to turn around Intel’s fortunes after the company reported a significant loss in 2024.

Meanwhile, TSMC’s expansion in the U.S. has reportedly raised concerns in Taiwan about the potential risks associated with such a significant investment abroad.

Price Action: TSMC shares are down 11.55% year-to-date, while Intel has gained 10.93% over the same period. However, over the past 12 months, TSMC is up 20.31%, whereas Intel has plunged 44.38%, according to Benzinga Pro.

According to Benzinga’s Edge Rankings, Intel holds a growth rating of 3.47%. Curious how TSMC stacks up? Click here to see the full comparison.