Intel, once a dominant force in the semiconductor industry, is facing increasing pressure that could lead to its split into separate entities.
Major industry players like Broadcom and Taiwan Semiconductor Manufacturing (TSMC) are exploring potential deals to break the company in two, The Wall Street Journal news report said. There is no information available on the possible value of the business.
The latest Gartner report indicated that Intel is the second largest semiconductor company with annual revenue of $49.189 billion. Intel has 7.9 percent share in the global semiconductor industry. Samsung is the leader in the semiconductor industry with 10.6 percent share. Samsung’s semiconductor conductor revenue was $66.524 billion in 2024.
Broadcom has shown particular interest in Intel’s chip design and marketing business, evaluating a possible bid. Earlier, Broadcom tried to buy Qualcomm.
Intel will accept the plan from Broadcom only if a suitable partner is found for Intel’s manufacturing operations.
TSMC, the world’s largest contract chipmaker, has been examining ways to take control of Intel’s manufacturing plants, possibly through an investor consortium or other structured deal.
Despite both companies assessing different parts of Intel’s business, they are not working together. The report said discussions remain preliminary and informal at this stage.
Leading these conversations on Intel’s side is its interim executive chairman, Frank Yeary, who has been engaging with potential suitors and U.S. government officials, the report said. Given Intel’s critical role in national security and domestic semiconductor manufacturing, any potential transaction is likely to face significant scrutiny from the White House.
The idea of a potential deal between Intel and TSMC has reportedly been encouraged by US president Donald Trump’s team during meetings with TSMC executives. This comes amid a broader effort by the U.S. government to secure domestic semiconductor production, a push that was strongly supported by former President Joe Biden’s administration.
Intel was a key beneficiary of this initiative, receiving a significant $7.86 billion government subsidy to enhance its chip manufacturing capabilities. However, despite these efforts, Intel has struggled to maintain its competitive edge in the global chip manufacturing industry.
A major factor contributing to Intel’s current predicament is its declining market valuation and operational struggles. TSMC, for instance, has a market capitalization nearly eight times larger than Intel’s, primarily due to its successful partnerships with leading AI chip companies like Nvidia and AMD — Intel’s longtime rival in the PC and server markets, Reuters news report said.
Intel’s recent history has been marked by ambitious but ultimately unsuccessful attempts to revamp its manufacturing operations. Former CEO Pat Gelsinger had laid out a strategy to enhance Intel’s AI and chip fabrication capabilities, aiming to attract major clients. However, the company failed to meet expectations, leading to lost contracts and, ultimately, Pat Gelsinger’s departure.
The financial strain caused by Intel’s capital-intensive manufacturing expansion plan has exacerbated the situation. This downturn forced the company to cut around 15 percent of its workforce, highlighting the challenges it faces in remaining competitive against more agile and specialized chipmakers.
Baburajan Kizhakedath
