Samsung and TSMC are unlikely to be buyers of Intel’s chip business

Intel management is considering several options for getting the company out of the crisis, including the sale of the FPGA division Altera, stopping the project to build a plant in Germany and, least likely, the sale of semiconductor production. But if the latter does happen, it is unlikely that Samsung and TSMC will be the buyers of this asset, the Korea Times and Korea Herald report.

Image Source: Intel

The potential sale of Intel’s semiconductor division has caused some concern in the market as participants began to speculate whether Intel would actually decide to do so and who the likely buyer might be. The company’s share of the semiconductor contract manufacturing market is currently small, the Korea Times notes, so its influence on competitors may be minimal, and it is unlikely to be able to increase Samsung’s share.

The distribution of the five largest contract manufacturers in the second quarter of 2024 did not change – these are TSMC (62.3%), Samsung (11.5%), SMIC (5.7%), UMC (5.3%) and GlobalFoundries (4. 9%), which firmly hold their positions, TrendForce notes. Moreover, Samsung’s investment in Intel’s semiconductor business threatens to turn into a risky venture: Samsung’s non-memory semiconductor production showed a loss of 300 billion won ($2.24 million) in the second quarter of 2024.

Another problem for a potential buyer of an asset is Washington’s policy—semiconductor production is a national security issue. Therefore, the US authorities may reject the candidacies of TSMC and Samsung and approve the American GlobalFoundries. Samsung, on the other hand, has faced the same challenges as Intel in semiconductor manufacturing: TSMC is known for its close ties to tech giants, and Samsung is seeing growing orders from startups and automakers. But now may be a turning point: IBM last week announced the Telum II processor and Spyre accelerator – they will be manufactured by Samsung using its 5 nm process technology. The company, according to the Korea Herald, would now be better off focusing on finding potential clients in the field of AI and getting orders from them, rather than trying to fight TSMC.