How Intel Falls

Trump, Broadcom and TSMC. The rise of American leveraged chip consortiums.

Image credit: Cryptopolitican.

Good Morning,

The Trump Administration might force Broadcom into a quasi-acquisition of Intel, and this is how it might happen. These rumors are in fact part of the pressure from the Trump Administration, where according to the WSJ, Broadcom has been closely examining Intel’s chip design and marketing business, adding that the company had discussed a potential bid with its advisers but would likely only proceed if it found a partner for Intel’s manufacturing business.

Broadcom has interest in Intel’s chip-design business, while TSMC is looking at the company’s factories.

Trump will likely use Taiwan’s precious position to try to get TSMC to do the grunt work of that job. With rumors swirling of a potential deal between Intel and TSMC to allow the former's fabs to manufacture the most advanced chips in America, a report from the Taiwanese press claims that TSMC might acquire a 20% stake in Intel's Intel Foundry business.

If this happens, it basically levels up Broadcom into Nvidia like territory, where it would become a BigTech hyperscaler of the future. Already its market cap is up 90% in the past year where it’s helping the likes of OpenAI to make their own chips.

Intel woes, could be Broadcom’s gains and for TSMC it might come at a cost. Broadcom is particularly interested in Intel's chip design operations, aiming to enhance its own capabilities in the semiconductor market. Concurrently, TSMC is evaluating the possibility of acquiring Intel's fabrication plants, which would expand its manufacturing capabilities significantly.

So this amounts to the U.S. trying to “steal” some of TSMC’s capabilities for itself while weakening Taiwan’s own Silicon Shield. That is, TSMC, the world’s biggest contract chipmaker, has separately studied controlling some or all of Intel’s chip plants, potentially as part of an investor consortium or other structure. TSMC is already spread thin with projects in Japan, Germany and Arizona.

I’m convinced this is the End of Intel as we know it