Broadcom Inc has had informal talks with its advisers about making a bid for Intel Corp’s chip-design and marketing business, the Wall Street Journal reported, citing people familiar with the matter.

Nothing has been submitted to Intel and Broadcom could decide not to pursue a deal, according to the Journal.

Bloomberg News earlier reported that Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is in early talks for a controlling stake in Intel’s factories at the request of officials at US President Donald Trump’s administration, as the president looks to boost US manufacturing and maintain the country’s leadership in critical technologies.

Trump officials raised the idea of a deal between the two companies in recent meetings with the Taiwanese chipmaker, a person familiar with the matter said, and TSMC was receptive. It is unclear whether Intel is open to a transaction.

The talks are in early stages, and the exact structure of a potential partnership has not been established, but the intended result would have the world’s largest made-to-order chipmaker fully operating Intel’s US semiconductor factories, the person said.

It also would address concerns about Intel’s deteriorating financial state, which has forced the company to slash jobs and curb its global expansion plans.

The arrangement might involve having major US chip designers take equity stakes, along with support from the US government, the person said.

That means the venture would not solely be owned by a foreign company. TSMC is the go-to chipmaker for Apple Inc, Nvidia Corp and other companies developing semiconductors that power artificial intelligence algorithms.

Still, the possible partnership could run into political hurdles, not unlike those that have hamstrung a proposed acquisition of United States Steel Corp by Japanese maker Nippon Steel Corp.

A White House official said that the president is unlikely to support a foreign entity operating Intel’s factories.

The White House official said the Trump administration supports foreign companies investing and building in the US, but is “unlikely” to support a foreign firm operating Intel’s factories.

Broadcom and TSMC are not working together and all talks so far are preliminary and largely informal, the Journal reported.

Intel interim executive chairman Frank Yeary has been leading the discussions with possible suitors and Trump administration officials, who are concerned about the fate of a company seen as critical to national security, the report said.

Yeary has been telling individuals close to him that he is most focused on maximizing value for Intel shareholders, the report added.

Intel, Broadcom, TSMC and the White House did not immediately respond to requests for comment.



Taipei Times