Chipmaking giants Broadcom Inc. and Taiwan Semiconductor Manufacturing Co. are reportedly mulling deals that could ultimately see their rival Intel Corp. carved up into two separate entities.

The Wall Street Journal reported this weekend that Broadcom is looking closely into the possibility of acquiring Intel’s chip design business, while TSMC is said to be keen on buying either some or all of the company’s chipmaking factories.

The report, which cites people familiar with the matter in both cases, notes that Broadcom and TSMC are not working together, and nothing has been agreed thus far. In fact, the talks are still at a very informal stage, the Journal noted. But if they proceed, they could ultimately lead to the breakup of Intel, whose dominance of the chipmaking industry was once so complete that such a move would have been unthinkable even a few years ago.

Intel’s interim Executive Chairman Frank Yeary has reportedly been holding talks with both suitors and officials from the Trump administration, who are worried about the fate of a company that is still viewed as critical to U.S. national security. Yeary has reportedly said his main focus is to maximize value for Intel’s shareholders.

Intel’s fall from grace began when it fell behind TSMC, which dominates advanced process nodes. That left the company vulnerable to rivals such as Advanced Micro Devices Inc., which outsource their chip production to TSMC, and it has struggled to compete in recent years, losing significant market share in key segments such as personal computers and data center servers.

In December, Intel’s longtime Chief Executive Pat Gelsinger was ousted by the company’s board of directors after failing to see through an ambitious turnaround plan that saw it separate its chip manufacturing business from the rest of the company.

The talks with TSMC regarding Intel’s factories, which now run as a separate business, are still in the exploratory phase, the Journal said. Trump officials have reportedly asked TSMC to explore an acquisition.

However, a White House official told the Journal that President Trump is unlikely to support any deal that would leave a foreign entity operating Intel’s factories, which are regarded as strategic assets.

Intel began separating its factory operations from its main chip design business in late 2022, in a move which means it treats orders from Intel’s design teams as the same as those from third-party customers. Last year, it began reporting its factory’s financial results separately, and plans to spin them off as a separate subsidiary with its own board of directors.

Intel’s interim co-CEO David Zinsner said in an interview with the Journal last month that the new structure would make it easier for the company to seek outside investment in the factory, which is seen as key to advancing its manufacturing capabilities as it strives to catch up with TSMC.

Any deal to sell off Intel’s factories would require authorization from the U.S. government under the CHIPS Act of 2022. Under the act, Intel was awarded $7.9 billion in funding to support the construction of new factories in Arizona and Ohio, as part of the government’s bid to boost its domestic chipmaking industry and reduce its reliance on foreign entities. With that deal, Intel is required to maintain majority ownership of its factories.

If TSMC were to acquire Intel’s factories, it would have to carry out some major retooling work in order to set them up to manufacture its most advanced chips, and those efforts could be complicated by the Trump administration’s stance on immigration. That’s because many of TSMC’s best engineers come from Taiwan and other non-U.S. countries.

Intel has already shed numerous parts of its business in recent years, including spinning off its Mobileye automotive chip business as a separate entity. It’s also in the process of offloading its programmable-chip division Altera, which had been acquired for $16.7 billion in 2015, as well as its venture capital arm, Intel Capital.

Speculation over Intel’s future has intensified since Gelsinger’s ousting, with other suitors reportedly including Qualcomm Inc., though that company’s interest has reportedly cooled. Broadcom CEO Hock Tan told the Financial Times in an interview in December that he has no interest in buying parts of Intel, as he’s more concerned about pivoting towards specialist artificial intelligence chips.

In the meantime, Intel continues its search for a permanent successor to Gelsinger. The company has reportedly hired the recruitment specialist Spencer Stuart to conduct the search on its behalf, but there’s no word yet on when a successor will be named.

Photo: Thomas Cloer/Flickr