Intel, TSMC recently discussed chipmaking joint venture, the Information reports

(Reuters) -Intel and Taiwan Semiconductor Manufacturing Co have recently discussed a preliminary agreement to form a joint venture to operate the U.S. chipmaker’s factories, the Information reported on Thursday, citing two people involved in the discussions.

TSMC, the world’s largest contract chipmaker, will take a 20% stake in the new company, the report said.

The White House and Commerce department officials have been pressing TSMC and Intel to strike a deal to resolve the long-running crisis at Intel, the report added.

Intel and TSMC declined to comment, while the White House did not immediately respond to a Reuters request for comment.

Reuters reported in March that TSMC had pitched Nvidia, Advanced Micro Devices and Broadcom to take stakes in a joint venture that would operate Intel’s factories, after the U.S. administration requested the Taiwanese chipmaking giant to help turn around the troubled U.S. icon.

Intel in March appointed former board member and chip industry veteran Lip-Bu Tan as its CEO to revive its fortunes after it missed out on the artificial intelligence-driven semiconductor boom while plowing billions of dollars into building out its chip-making business.

The company’s efforts to manufacture chips for external clients have faced challenges as it fell short of providing the level of customer and technical service as rival TSMC, leading to delays and failed tests, former executives have told Reuters.

Intel reported 2024 net loss of $18.8 billion, its first since 1986, driven by large impairments.

Shares of the company lost 60% of their value in 2024, compared with an over 23% rise in the benchmark S&P 500 index.

The shares have recovered some of those losses this year and are up nearly 12%.

Last month, TSMC said at a press event that it plans to make a fresh $100 billion investment in the U.S. that involves building five additional chip facilities.

(Reporting by Jaspreet Singh in Bengaluru; Editing by Shinjini Ganguli)