Let’s make a trip to the past. The year is 1997 and Steve Jobs has just returned to Apple but the state of the company is terrible and its future, uncertain. To try to save her, Apple began to look for strategic alliances, and that was when she announced an absolutely unusual partnership with Microsoft.
Bill Gates’s company would invest 150 million dollars in Apple. Both companies would collaborate on several fronts. That unique agreement seemed impossible. Both companies were fierce rivals, but the truth is that both won with that alliance.
Now it seems we could live an analogous situation with two other companies that are also large rivals. On one hand, Intel, which is experiencing challenges similar to those Apple faced in 1997. On the other, TSMC, which dominates the semiconductor market much like Microsoft’s stronghold in the software market at the time.
According to The Wall Street Journal, both companies are negotiating a surprising yet potentially beneficial alliance. If TSMC aids Intel’s “salvation,” it will grant TSMC an advantageous position in future agreements with the U.S. government.
This government currently owns 10% of Intel’s shares. For better or worse, to maintain a good relationship with Intel means establishing rapport with the current administration. Given the policies encouraging domestic chip production to circumvent tariffs, this prospective alliance becomes a lucrative opportunity.
Additionally, the agreement favors TSMC’s interests by mitigating potential antitrust concerns. How can it be seen as a monopoly when helping a competitor avoid failure? As was demonstrated with Apple and Microsoft, eliminating competition isn’t the only way to secure victory in the tech landscape.
A Promising Transition
The historical crisis that Intel is facing has led its new CEO, Lip-Bu Tan, to make difficult yet necessary decisions. Mass layoffs are part of that strategy, but the company is also undergoing a comprehensive restructuring. Even more significantly, Intel has acknowledged the need to embrace the end of the “exclusive chip” era.
The firm understands that manufacturing solely for itself is not a viable path. Instead, it aims to focus on becoming a chip factory for third parties—a model that has propelled TSMC to its current position.
If the alliance with TSMC materializes, it would signify a unique strategy by Intel. Recently, notable alliances have unfolded:
- SoftBank injected 2,000 million dollars
- The U.S. acquired 10% of Intel for 8,900 million dollars
- Nvidia invested 5,000 million dollars
- Apple is a potential collaboration candidate
- And now TSMC might also join this coalition
These collaborative ventures provide Intel with a much-needed lifeline as it navigates its current challenges. If these alliances come to fruition, Intel will face two significant objectives. First, they must fulfill their promises regarding their 14-nanometer node, which is crucial for their strategic plans. Second, they need to attract customers for that node. This is where the new agreements can play a vital role.
Image | Intel
In Xataka | Intel has confirmed that the 20A node will be skipped to reduce expenses. The 18A node will enter production in 2025.