After Intel settled down plans for restructuring last week, revealing schemes to transform its foundry business into an independent unit with its own board, some potential buyers have been reportedly emerged. After Qulacomm’s rumored proposal of a friendly takeover, latest reports by Bloomberg and Reuters note that U.S.-based asset management company Apollo has recently expressed interest in making an equity-like investment worth up to USD 5 billion in Intel.

However, another U.S. chip giant Broadcom, which had earlier been exploring the possibility of pursuing such a deal, is said not actively considering an offer for Intel at the moment, Bloomberg suggests.

Citing sources familiar with the matter, Bloomberg notes that advisers are still presenting ideas to Broadcom. However, a spokesperson for Broadcom declined to comment.

It is worth noting that in 2018, Broadcom’s planned acquisition of Qualcomm was blocked by the U.S. government due to national security concerns. A potential deal between Broadcom and Intel would likely encounter similar regulatory hurdles.

On the other hand, U.S.-based asset management firm Apollo is said to shown interest in making an equity-like investment of several billion dollars in Intel, while the struggling giant is currently considering Apollo’s proposal, according to Bloomberg and Reuters.

The discussions, though, are still in the early stages and no agreement has been reached, the reports indicate.

This is not the first time Apollo has shown its interest in Intel. Earlier in June, the buyout firm and Intel announced a definitive agreement under which Apollo-managed funds and affiliates will lead an investment of USD 11 billion to acquire from Intel a 49% equity interest in a joint venture entity related to Intel’s Fab 34.

According to Apollo’s press release, located in Leixlip, Ireland, Fab 34 is Intel’s leading-edge high-volume manufacturing (HVM) facility designed for wafers using the Intel 4 and Intel 3 process technologies. To date, Intel has invested USD 18.4 billion in Fab 34.

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• [News] Qualcomm Rumored to Consider Acquiring Parts of Intel’s Chip Design Business, with a Focus on PC Segment
• [News] Qualcomm’s Potential Takeover of Intel Might Have Minimal Impact on TSMC, But Not MediaTek

(Photo credit: Intel)

For Intel, last week was like a roller coaster. On Monday, the company settled down plans for restructuring after the board meeting. On Friday, however, according to reports by The Wall Street Journal and Bloomberg, it turns out that Qualcomm has reportedly reached out to Intel regarding a potential acquisition offer, which would rank as one of the largest-ever technology mergers if the deal were to take place.

Should Qualcomm take over Intel, the mega deal may have limited impact on TSMC, the world’s largest foundry. However, Taiwanese smartphone chip giant MediaTek would be more heavily impacted, according to Taiwanese media the Economic Daily News and Commercial Times.

Citing domestic and foreign institutional investors, the Economic Daily News notes that regarding that the Broadcom-Qualcomm saga came to an abrupt end in 2018, the likelihood of the Qualcomm-Intel deal to realize might be low. However, if the acquisition does go through, it could create certain impact on Taiwanese manufacturers.

Citing remarks from Hong Kong-based and foreign semiconductor analysts, the report by the Economic Daily News points out that Intel’s weakness in its foundry unit would be its fatal flaw. With Intel’s yield rates and performance in the advanced nodes lagging behind TSMC, even if Qualcomm successfully acquires Intel, it is expected that Qualcomm would not reclaim the orders currently outsourced to TSMC, indicating the impact to the Taiwan-based foundry giant would be minimal.

Furthermore, the report suggests that from Qualcomm’s perspective, the more logical scenario would be to acquire only Intel’s chip design business. However, from Intel’s standpoint, they would prefer to sell the entire company as a package. Thus, the analysts cited by the report project that Qualcomm is more likely to spin off Intel’s chip manufacturing business and sell it to a U.S. private equity firm after the acquisition.

Actually, in early September, a report by Reuters suggests that Qualcomm, known for its Snapdragon processors used in smartphones, had investigated the possibility of acquiring parts of Intel’s design business to enhance its product portfolio, and was particularly interested in Intel’s PC business.

On the other hand, the story may be different for Taiwanese chip makers. A report by the Commercial Times notes that the acquisition could create pressure on MediaTek, which is Qualcomm’s main rival, as it may face even fiercer competition in sectors like AI PCs and automotive platforms, of which the Taiwanese smartphone chip giant is expected to launch new products next year.

In addition, the takeover would also have negative impact on AMD’s supply chain in Taiwan, including companies like ASMedia, which specializes in high-speed Switch IC, USB, PCIe and SATA controllers, Commercial Times indicates.

It is worth noting that the potential deal would face significant challenges, particularly with antitrust and national security concerns, a report by CNBC notes. For instance, Intel’s recent attempt to acquire Tower Semiconductor and Qualcomm’s bid for NXP Semiconductor were both blocked by Chinese authorities, the report says.

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• [News] Qualcomm Rumored to Consider Acquiring Parts of Intel’s Chip Design Business, with a Focus on PC Segment
• [News] Intel to Turn Foundry Unit into Subsidiary, with Projects in Germany and Poland Delayed for 2 Years

(Photo credit: Qualcomm)

By announcing a two-year delay in its plan to build chip factories worth €30 billion (USD 33 billion) in Magdeburg, Intel seems to find a way to temporarily alleviate its financial burden. However, a report by German media outlet DW News warns that the chances of the US chipmaker eventually moving forward with its Magdeburg plans are “no higher than 50%,” indicating the withdrawal may deal a heavy blow to Germany’s economic outlook.

Citing Alexander Schiersch from the Institute for Economic Research (DIW) in Berlin, the report notes that Intel’s ambitious plans have “fallen short.” Three key challenges for Intel has been highlighted: attracting more customers for its chips, improving its AI strategy, and ensuring that cost-cutting measures are effective.

Given the circumstances, Schiersch estimates the likelihood of Intel fully executing its Magdeburg plans at “no more than 50%,” the report suggests.

The report also states that Intel’s move underscores the failure of Germany’s three-party coalition government to drive new investments, with debates on the allocation of the nearly €10 billion set aside for subsidies reignited.

According to DW News, following Intel’s announcement, Finance Minister Christian Lindner proposed redirecting the unspent funds to address a significant shortfall in the German budget. However, the Greens, part of the coalition government, opposed this idea, advocating instead for the funds to be used for climate initiatives. Chancellor Olaf Scholz of the Social Democrats has yet to take a definitive stance.

According to Intel, the German mega-fab is expected to create 3,000 high-tech jobs. During the construction phase, around 7,000 workers will also be employed in the construction industry. In addition, tens of thousands of additional jobs are expected to be created by suppliers and partners.

The German government has pledged €9.9 billion in state aid in terms of the project, as the investment is seen crucial in reducing Germany’s reliance on Asian semiconductors, particularly for its key automotive industry.

However, Volkswagen, one of the largest automaker in Europe for decades, has also been struggling, warning about potential job cuts and production line closures in Germany for the first time in its 87-year history, which may also prompt Intel’s decision. The weak market demand, particularly for its electric vehicles (EVs), is said to be the main reason for this move.

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• [News] Intel Reportedly Sought Commerce Secretary Raimondo’s Help over U.S. Reliance on TSMC
• [News] Intel to Turn Foundry Unit into Subsidiary, with Projects in Germany and Poland Delayed for 2 Years

(Photo credit: Intel)

While all eyes are on Intel’s restructuring plan, which features the foundry unit’s spin-off and the delay of Germany and Poland factories, there is another critical decision regarding its photonics business.

According to Intel’s announcement, the tech giant is moving Integrated Photonics Solutions (IPS) into its Data Center and Artificial Intelligence division (DCAI), as it tries to drive a more focused R&D plan that’s fully aligned with its top business priorities.

This shuffle seems to be reasonable, as earlier this year, Intel has achieved a milestone in integrated photonics technology for high-speed data transmission, and the two arenas seem to be inseparable.

A few months ago, Intel demonstrated the industry’s most advanced and first-ever fully integrated optical compute interconnect (OCI) chiplet co-packaged with an Intel CPU and running live data. According to Intel, the OCI chiplet represents a leap forward in high-bandwidth interconnect by enabling co-packaged optical input/output (I/O) in emerging AI infrastructure for data centers and high performance computing (HPC) applications.

A report by Photonics Spectra notes that Intel’s IPS division focuses on technologies such as light generation, amplification, detection, modulation, CMOS interface circuits, and package integration.

Here’s why this technology matters: As chipmakers advance Moore’s Law, increasing transistor density, signal loss during transmission becomes a significant issue because chips use electricity to transmit signals. Silicon photonics technology addresses this problem by using optical signals instead of electrical ones, allowing for high-speed data transmission, greater bandwidth, and faster data processing.

Intel has been developing silicon photonics technology for over 30 years. Since the launch of its silicon photonics platform in 2016, Intel has shipped over 8 million photonic integrated circuits (PICs) and more than 3.2 million integrated on-chip lasers, according to its press release. These products have been adopted by numerous large-scale cloud service providers.

In addition to Intel, rivals such as AMD and TSMC are also accelerating the development of next-generation silicon photonic solution.

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• [News] Venturing into Silicon Photonics, AMD Reportedly Seeks Partnerships in Taiwan
• [News] TSMC’s Latest Advancements in CFET, 3D Stacking, and Silicon Photonics

(Photo credit: Intel)

In early September, rumors have it that TSMC’s first US fab in Arizona began producing engineering wafers using the 4nm process in April, with yields reportedly comparable to those manufactured in its Southern Taiwan Science Park facility. Now here’s the latest update: the fab has started trial production for Apple’s A16 chip, according to a report by Tim Culpan at substack, a technology columnist.

Tim Culpan notes that the mobile processors are manufactured with TSMC’s 5nm, or the so-called N4P node, which is the same as the node used in Taiwan to manufacture A16. The N4P node is actually a member of the 5nm family, as it is regarded as an enhanced version of 5nm, the report explains.

It is worth noting that Apple’s A16 SoC, though launched two years ago with iPhone 14 Pro, is considered as one of the most advanced mobile chips for the company, as the chip is also be seen in iPhone 15 and iPhone 15 Plus models. Culpan indicates that the move marks a milestone that instead of beginning with some less critical chips, Apple and TSMC intend to aim high from the start.

According to Culpan, Apple’s A16 is currently being trial-produced at TSMC Arizona’s “Fab 21” Phase 1 facility, with a small production volume. However, once the second stage of the Phase 1 fab is completed, the output will significantly increase.

TSMC plans to build three plants in Arizona, each with cleanroom spaces twice the size of typical logic fabs in the industry. The first fab is expected to begin mass production in the first half of 2025.

TSMC’s second fab in Arizona will use 2nm process technology to meet strong AI-related demand, with production expected to begin in 2028. The third fab will employ 2nm or even more advanced process.

However, the situation for Samsung’s investment in the U.S. would be a different story. A previous report from Korean media outlet Business Korea noted that persistent issues with its 2nm yield rate have led Samsung to decide to withdraw personnel from its Taylor, Texas plant, signaling another setback for its advanced wafer foundry business.

As for Intel, which proactively pursues the support of the U.S. government, it is holding steadfast on its investments in the country despite recent announcements to spin-off its foundry business and delaying the projects in Germany and Poland for two years.

Intel plans to invest USD 100 billion over the next five years in new fabs and expansions across Arizona, New Mexico, Ohio, and Oregon, creating 10,000 manufacturing jobs and 20,000 construction jobs.

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• [News] Showing Positive Progress, TSMC’s Arizona Fab Reportedly Reaches Production Yields on Par with Taiwan
• [News] TSMC Receives USD 6.6 Billion for Chipmaking from the US Government, Commits to Constructing Third Fab

(Photo credit: Apple)