Broadcom, TSMC Rumored to Be Looking at Intel Acquisitions — Which Would Split the Company in Half
One of the biggest names in semiconductors has fallen on hard times — and the vultures are circling.
Broadcom and Taiwan Semiconductor (TSMC) are both pondering acquiring separate parts of Intel's business in deals, which would see the former take of chip design and marketing and the latter semiconductor manufacturing — as the storied processor maker hits turbulent times.
Unnamed sources speaking to The Wall Street Journal have claimed "preliminary and largely informal" acquisition discussions between Broadcom and TSMC and their advisors for deals, which would see the pair picking up two distinct parts of Intel: Broadcom being reportedly interested in the company's chip design and marketing divisions, while the latter could take over the company's chip fabrication facilities and foundry business.
Founded in 1968 by Gordon Moore and Robert Noyce, both former co-founders of Fairchild Semiconductor, Intel — briefly NM Electronics before adopting its current name from the words "integrated" and "electronics" — started as a manufacturer of random access memory (RAM) components before branching out to develop the world's first commercially-available microprocessor: the Intel 4004. While created as a cost-reducing component for a calculator, the general-purpose part put the company on a path to create the x86 architecture and become one of the largest chip design and manufacturing concerns in the world.
Recently, though, the company has struggled to keep up with the demands of Moore's Law — an observation by Moore that the number of transistors on a leading-edge component tends towards a doubling roughly every 18 months, since adopted as an informal performance-doubling target by the industry as a whole. As feature sizes drop to single-digit nanometers, physical limitations raise their head making it hard to continue the shrinkage necessary to keep cramming more components on each chip. Increased competition from long-term rivals AMD and Arm, the rise of the free and open-source RISC-V architecture, and struggles to compete with NVIDIA in the artificial intelligence (AI) market have all led to a series of financial losses and the ouster of former chief executive officer Pat Gelsinger — leaving investors concerned about the company's future, particularly following its exit from the Dow Jones Industrial Average in favor of NVIDIA in November last year.
It's against this backdrop that Broadcom and TSMC have shown early interest. Broadcom, for its part, has enjoyed considerable success with a broad range of products including the Arm-based system-on-chip families powering the popular Raspberry Pi single-board computer (SBC) and computer-on-module (COM) devices. Acquiring Intel's chip design and marketing business would make it the largest chipmaker in the world, and give it a license to build 32- and 64-bit x86 chips alongside its existing Arm parts.
TSMC, meanwhile, is rumored to be looking at Intel's chip fabrication facilities and foundry business to run alongside its own with particular interest in its US-based facilities, which are eligible for government funding under the CHIPS Act — an eligibility that may, however, be cancelled should the facilities fall under foreign ownership. TSMC's move to single-digital nanometer process nodes has, in comparison to Intel's, gone relatively smoothly — and the company was the first to produce commercial parts patterned using ASML's extreme ultraviolet (EUV) lithographic process in high volume.
Should either or both acquisitions go ahead, Intel would effectively be split in two — following in the footsteps of rival AMD, which spun off its manufacturing business in 2008 to create what is now known as GlobalFoundries. Like Intel, AMD's decision was largely driven by financial considerations at at time when it was struggling to compete; the move turned AMD into a fabless design house reliant on outside manufacturing and gave its former fabrication division the ability to take on business from rival companies.
Neither Broadcom, TSMC, nor Intel have publicly commented on the rumors; if any such acquisition should take place, it would be subject to international scrutiny by competition authorities concerned about the size of the resulting merged companies.