Intel Weighs Taiwan Semiconductor Partnership To Boost Chip Game

Intel Corp INTC CEO Lip-Bu Tan said Thursday that he met with Taiwan Semiconductor Manufacturing Co TSM to explore a partnership as the former struggled to ramp up its foundry business.

Tan hinted at his plans to boost the struggling chipmaker’s prospects by fostering a return to the office mandate and focusing on core engineering work, Reuters cites from an investor meeting.

The chipmaker plans to reduce operational expenses to $17 billion in 2025 and $16 billion in 2026 while cutting its 2025 capital expenditure target from $20 billion to $18 billion.

Also Read: Taiwan Semiconductor To Begin Production Of Advanced 1.4nm Chips In 2028

On Thursday, Intel reported first-quarter revenue of $12.67 billion, surpassing analyst expectations of $12.3 billion. Adjusted earnings of 13 cents per share topped the projected 1 cent. However, Intel forecasts second-quarter revenue between $11.2 billion and $12.4 billion, below the $12.84 billion analysts expected.

Reuters cited CFO David Zinsner during the investor meeting as saying tariff concerns prompted customers to hoard Intel chips, boosting sales in the first quarter. However, the company, unable to determine the tariff concerns induced surplus, expects the second quarter to suffer.

Zinsner said the very fluid trade policies in the U.S. and beyond and regulatory risks have increased the chance of an economic slowdown with the probability of a recession growing.

China imports $10 billion worth of chips from the U.S. annually. About $8 billion of these are central processing units (CPUs) assembled by Intel in the U.S., Reuters cited Bernstein analysts.

Intel stock plunged 38% in the last 12 months as it failed to capitalize on the shift to artificial intelligence accelerators, similar to those of Nvidia Corp NVDA and Taiwan Semiconductor.

Intel fired its chief Pat Gelsinger in 2024 after his turnaround plan to take on Taiwan Semiconductor failed to impress the board.

Intel struggled as rivals Advanced Micro Devices, Inc AMD and Nvidia captured market share in data centers, AI, and GPUs, impacting profitability.

Intel reportedly tapped Taiwan Semiconductor for a 2nm process to manufacture Nova Lake PC chips, which are expected to be available in 2026.

Recently, Taiwan Semiconductor told Bloomberg that it had not discussed forming a venture or sharing its technology with any company, dismissing speculation of a possible collaboration with Intel.

Price Actions: At the last check Friday, INTC stock was down 8.05% to $19.77 premarket.

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