Intel Corp shares gained on a report that the company tentatively agreed to a Taiwan Semiconductor Manufacturing Co joint venture, a sign the beleaguered US chipmaker is moving ahead with a plan that’s been highly anticipated by investors.
The shares climbed more than 2% on Thursday after the Information website reported the news, erasing a decline of more than 5% earlier in the session. The stock had been up about 10% this year through Wednesday, fueled in part by hopes that Intel would pursue such a move.
Executives from both companies reached a preliminary agreement to form a joint venture that would run Intel’s manufacturing plants, the Information reported. Intel and other American chipmakers will hold the majority of stock in the initiative, which would include at least some of the US company’s factories, said the news site, which cited unnamed people familiar with the situation.
Bloomberg News reported in February that the companies were discussing the idea at the request of the Trump administration. The scenario is meant to help address Intel’s deteriorating financial state, which has forced the company to cut thousands of jobs and curb its expansion plans.
A representative for Santa Clara, California-based Intel didn’t immediately respond to a request for comment, while TSMC declined to comment.
If the plan goes forward, it would be a dramatic early step for Intel Chief Executive Officer Lip-Bu Tan, who just took the job last month. During an appearance at the Intel Vision conference in Las Vegas on Monday, he said the chipmaker would spin off assets that aren’t central to its mission.
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As part of the joint venture negotiations, TSMC has discussed sharing some of its manufacturing techniques with Intel in exchange for a 20% stake in the new company, the Information said. But some Intel executives are concerned that the deal would lead to layoffs and sideline its existing chipmaking technology, the website said.
Already, TSMC has been stepping up investments in the US. CEO C.C. Wei joined Trump at an event last month and pledged to spend an additional $100 billion on American chipmaking plants.
