Intel is reportedly in talks to spin off its chip factories into a partnership with arch rival TSMC and now I think I've seen everything

pcgamer.com:

I've seen pretty much everything in this industry over the years. And, yes, that does include a man eating his own head. But Intel and TSMC going into the chip foundry business together? Sorry, what?

This rumour, and it very much is a rumour, comes from an equities analyst at investment bank Baird who cited discussions between TSMC and Intel. According to the Wall Street Journal and to broadly précis this particular yarn, the rough idea is for TSMC to send some of its best engineers to Intel's fabs to sort them out. They can then be spun off into a separate entity managed by TSMC but co-owned by both companies.

If you're thinking this sounds like wild speculation, it does. But the markets are taking it seriously, with Intel's share price spiking by fully 6% when the rumour broke. So the question is, does it make sense?

For starters, if there's any truth to this story then it speaks volumes about the health of Intel's all-important upcoming 18A node. And not in a good way. If 18A is all Intel is cracking it up to be, then there would be no need to parachute in TSMC engineers and Intel wouldn't be looking to spin off its fabs.

Personally, I doubt 18A is as healthy as Intel claims, otherwise CEO Pat Gelsinger would not have been ejected, sorry retired, from his role. So, let's take this rumour seriously for a moment and consider the implications.

On the one hand, the idea that TSMC in part or whole takes control of Intel's fabs could be great for the US chip industry and the broader chip supply chain. The world's chip supply would no longer be so dependent on production in a location constantly teetering on edge of a geopolitical crisis thanks to tensions between Taiwan and China.

More chips produced in the US also sidesteps any concerns over increasing electronics prices thanks to the possible imposition of hefty tariffs on Taiwanese chip of up to 100% by the Trump administration.

Keep up to date with the most important stories and the best deals, as picked by the PC