U.S. chipmaker Intel (INTC) is considering selling itself in two parts to rivals Taiwan Semiconductor Manufacturing Co. (TSM) and Broadcom (AVGO).
According to media reports, embattled Intel is mulling a proposal that would see Broadcom acquire its chip design and marketing business.
At the same time, Taiwan Semiconductor, the world’s biggest contract chipmaker, would take control of some or all of Intel’s microchip manufacturing plants, known as “foundries.”
The media reports note that Broadcom and Taiwan Semiconductor are not working together and talks so far are preliminary.
Intel’s interim executive chairman, Frank Yeary, is reportedly leading the discussions with involvement from the administration of U.S. President Donald Trump, which views Intel and its chips as important to national security.
Intel has struggled over many years to pivot from designing microchips and processors to also manufacturing them.
The company received more than $8 billion U.S. in government subsidies from the previous administration of U.S. President Joe Biden, which sought to onshore chip making in the U.S.
Intel cut 15% of its workforce and CEO Pat Gelsinger was fired last year. Gelsinger’s replacement is still being sought.
Taiwan Semiconductor has a market valuation that’s eight times larger than Intel’s, and it is the largest contract manufacturer of microchips and semiconductors in the world, including for Nvidia (NVDA) and Apple (AAPL).
Some concerns have been raised about a foreign company such as Taiwan Semiconductor taking over Intel’s chip manufacturing business, according to the media reports.
Intel’s stock has declined 47% over the past 12 months and currently trades at $23.60 U.S. per share.
