Intel (NASDAQ: INTC) and Taiwan Semiconductor Manufacturing Company (NYSE: TSM) have reportedly reached a tentative agreement to create a joint venture to manage Intel's semiconductor manufacturing facilities in the United States.

According to sources cited by The Information and Reuters, TSMC will take a 20% stake in the venture. The ownership structure for the remaining 80% is unclear, but earlier reports suggested that TSMC had approached major U.S.-based chip designers—including AMD, Broadcom, Nvidia, and Qualcomm—to invest in the venture. Both Nvidia and a TSMC board member have denied such discussions.

Government Influence and Strategic Implications

The reported deal is believed to have been influenced by the White House and the U.S. Department of Commerce as part of efforts to stabilize Intel's struggling foundry business. Intel's IDM 2.0 strategy has faced setbacks, failing to establish leadership in either semiconductor manufacturing or product performance. However, the U.S. government remains opposed to selling Intel's fabs outright to a foreign company—especially TSMC.

Intel's fabs, valued in the tens of billions of dollars, are designed primarily for its own chip production. Many are limited to manufacturing on Intel 3 and Intel 4 nodes, with only a few capable of producing on Intel's advanced 18A process technology. It remains unclear how TSMC's 20% ownership stake in Intel Foundry Services will align with its ongoing $165 million investment in its Arizona Fab 21 facility, which produces chips for partners such as Apple.

Market Reactions and Industry Impact

Following the news, Intel's stock surged nearly 7%, partially recovering from losses tied to recently announced U.S. import tariffs. In contrast, TSMC's U.S.-traded shares fell approximately 6%, reflecting mixed investor sentiment regarding the partnership.

Neither Intel nor TSMC have officially commented on the reports, as both companies remain in their pre-earnings quiet periods. However, this potential joint venture could significantly reshape the semiconductor manufacturing landscape in the U.S. amid rising geopolitical tensions and ongoing supply chain realignments.