Exclusive: TSMC’s Former General Counsel on Foundry Giant’s Strategic Logic
Dr. Richard L. Thurston’s insights offer a compelling narrative, rooted in TSMC’s core principles and strategic considerations.
The semiconductor world has been abuzz for months with rumors of a possible joint venture or collaboration between Intel and TSMC, captivating even the most reputable news sources. Yet, a fundamental understanding of TSMC’s strategic logic and pure-play foundry business model casts serious doubt on these claims. While TSMC Chairman C.C. Wei has reiterated that Intel is a customer, the persistence of the rumors forced him to explicitly state during the company's Q1 2025 earnings call in mid-April that no joint venture, technology licensing, or technology transfer discussions are underway.
In an exclusive interview with TechSoda, Dr. Richard L. Thurston, TSMC’s former Senior VP and General Counsel, offers crucial perspective on why such a partnership with Intel is at odds with TSMC's core principles and strategic direction.
“When I was there, certainly we explored buying various companies like IBM's Microelectronics Division, which was a very serious discussion, but that was 100% acquisition,” Thurston emphasized that the rumors did not make sense, saying that TSMC pitched other companies to take minority stakes at Intel. Broadcom and Nvidia also denied the rumors. TSMC did not acquire IBM’s semiconductor division for several reasons, especially political opposition from Albany, NY. It was instead acquired by Global Foundries in July 2015 (an Acquisition agreement was signed in October 2014).
What you will learn from this article:
What are the differences between Intel’s integrated device manufacturer (IDM) model and TSMC’s pure-play foundry model? What are their respective strengths and weaknesses?
Five key reasons why TSMC would be adverse to a hypothetical TSMC-Intel joint venture
“How to Get Smart: Avoid Falling for Groundless Semiconductor Rumors”: Red flags that can signal false rumors
Dr. Thurston’s Check List: A list of key questions grouped into investigative themes to help assess whether the rumor has substance or is baseless speculation.
IDM vs Pure-Play Foundry
For readers who are not familiar with different business models of the semiconductor industry, it is important to understand that TSMC, as a pure-play foundry, is very different from integrated device manufacturers (IDMs) like Intel and Samsung. Pure-play foundries focus on only the manufacturing part to serve multiple customers, including IDMs such as AMD, Intel, fabless semiconductor companies such as Qualcomm and Nvidia, and IC design houses such as Faraday, Andes Technology, and the like.
Since pure-play foundries operate on a business model and mindset completely different from IDMs, there are multiple incompatibilities if Intel is to form a joint venture with any pure-play foundry and keep its operation as an IDM. That is perhaps why Samsung and Intel have found it challenging to operate a hybrid model in recent years. If yield is not an issue, to run a foundry division under their wings to produce chips for fabless companies, they have to persuade customers that there will be no conflict of interest. However, it would be a tough sell if Intel had products that directly compete with customers.
Here we summarize the comparison between IDMs and pure-play foundry models for readers in a video:
Dr. Thurston’s insights on why TSMC would be adverse to a hypothetical TSMC-Intel joint venture:
TSMC’s Superiority in Semiconductor Manufacturing: TSMC is “best in class” in world-wide semiconductor manufacturing, far surpassing Intel. This technological leadership and TSMC’s strict rules on technology transfers, protection of its trade secrets make sharing technology in a joint venture unappealing. “We would always guard our IP fiercely and especially that of our customers. We were always adverse to JVs because of the risk of technology ‘leakage’ and even contamination,” said Thurston.
Adverseness to Joint Ventures: Before Dr. Thurston joined TSMC in late 2001, TSMC had led a joint venture with Altera, Analog Devices and ISSI (1996-1999). Although the JV failed for a variety of reasons, it left a very negative impression on TSMC Founder Dr. Morris Chang. His subsequent strong adverseness to JVs. during Dr. Thurston’s tenure at TSMC, Dr. Chang retained strong reservations about TSMC’s ability to manage successfully joint ventures. He would prefer a model that Dr. Thurston had developed at TI, reflective in the Sony and Bosch fab projects today. The company’s preference has always been to maintain control, especially over technology and operations, either through outright acquisitions or by working closely with customers in arrangements that differ significantly from joint manufacturing partnerships.
Impact on Market and Investor Confidence: As the world’s largest chip maker, TSMC’s earnings, margins and stock price depend on preserving trust, stability, predictability, and independence. Entering speculative partnerships such as a hypothetical Intel JV, would also threaten customer confidence, potentially have trade secret issues, and reduce TSMC’s competitiveness. An important consideration is this regard – would a JV with Intel have an adverse effect on TSMC’s commitments in Arizona. Dr. Thurston believes it “most certainly would”.
Cultural Integration Challenges: Achieving cultural integration would be absolutely critical for the success of a hypothetical TSMC-Intel joint venture. The foundational organizational and people cultures of the two companies are deeply different. I would envision that the many differences would cause friction almost immediately in governance, operations and even staff morale. If not handled with extraordinary care and patience, cultural integration failures would almost certainly cause a TSMC-Intel joint venture to either (a) underperform severely, and/or (b) collapse within 1-3 years. Cultural integration is NOT a “soft issue’ to be ignored.
Regulatory and Geopolitical Concerns: Regulatory scrutiny in the U.S., EU, China, S.Korea, etc. , further complicates the feasibility of a joint venture. Among the challenges that would have to be addressed, and likely would be insurmountable are; Antitrust/Unfair Competition (US, EU, S Korea and China), CFIUS (because TSMC would retain significant control or influence), various National Security laws (multiple countries), the U.S. Defense Production Act, ITAR and Wassenaar, etc. TSMC should also be keenly aware of the geopolitical implications of such partnerships, especially because US-China tensions and Taiwan Strait instability would impact the considerations of the various regulators .
Thurston also pointed out several red flags that can signal false rumors: anonymous sources, lack of strategic logic, contradictions with public statements, high-risk technology or IP transfer with political implications, sudden stock movements unsupported by fundamentals, and social media chatter without credible institutional reporting.
He provides a comprehensive framework for understanding TSMC’s strategic decisions and for critically assessing industry rumors. By adhering to these guidelines, investors and reporters can better navigate the complex landscape of the semiconductor industry and avoid being swayed by unfounded speculation.
“How to Get Smart: Avoid Falling for Groundless Semiconductor Rumors”:
1. Industry Structure: Learn who’s a foundry (like TSMC), who’s an IDM (like Intel), and how business models differ. TSMC’s neutrality is its competitive moat—it won’t compromise it.
2. Historical Patterns: Has the target company ever done something like this before? For example, TSMC has consistently avoided traditional joint ventures and direct tech transfer deals, most especially with “competitors”. You need to understand the historical perspectives of a company’s key management; in the case of TSMC, that of Dr. Morris Chang.
3. Sources: Rely on company filings, earnings calls, or executive interviews—not second-hand tweets, anonymous sources, or tabloids. If it doesn’t come from one or both of the targeted companies or a regulatory disclosure, treat it skeptically.
4. Ask the Core Questions: Always consider what would the company gain? What would it risk? If a rumor involves a high risk and little strategic upside, it’s probably false.
5. Regulatory Perspective: Tech exports, especially advanced nodes, are tightly controlled. The U.S. BIS, Taiwan’s Ministry of Economic Affairs, and global trade regimes monitor TSMC activities closely—rumored deals involving sensitive IP would be red-flagged early.
As semiconductor companies navigate the uncertainties in today’s geopolitical struggles between Great Powers, they also face risks from rumor mills that want to seize their benefit or interest by encouraging speculations.
Dr. Thurston pointed out that to determine the basis for a rumor about a proposed merger, acquisition, or joint venture, it’s essential to apply a structured due diligence mindset—similar to early-stage deal vetting.
Here’s a list of key questions grouped into investigative themes provided by Thurston to help assess whether the rumor has substance or is baseless speculation.
Checklist of Investigative Themes
A. Source Credibility & Origin
1. Where did the rumor originate? Was it from a reputable media outlet, industry insider, social media, analyst report, or employee leak?
2. Is the source credible, connected, or previously reliable?
3. Has this outlet or person correctly reported past deals or misfired often?
4. Is there any attribution or just “market chatter”?
B. Timing and Market Context
1. Is there a strategic or financial reason for a deal now? Industry consolidation, distressed target, regulatory pressure, or technology shift?
2. Is either company under pressure (activist investors, earnings miss, CEO change)?
3. Is there a trigger event (trade shows, executive travel, layoffs, or strategic reviews)?
C. Strategic Fit & Logic
1. Would the rumored companies make strategic or operational sense as partners?
2. Is there a complementary product line, market access, or technology alignment?
3. Is there overlap in talent, customers, or supply chains? Or would this be a poor cultural or operational fit?
D. Internal & Public Clue
1. Has either company recently hinted at M&A/JV activity in earnings calls or filings?
2. Any sudden executive movements or non-disclosure patterns?
3. Have employees been asked to withhold information or cancel meetings with external partners?
4. Are there unusual financial filings, trademark applications, facility visits, or regulatory notifications?
E. Regulatory and Legal Filings
1. Have there been any Hart-Scott-Rodino (HSR) filings or pre-merger notifications?
2. Any recent CFIUS, antitrust, or foreign investment review developments?
3. Are the companies in sectors where cross-border review would be triggered?
F. Market Activity
1. Has there been unusual stock price or volume activity (especially prior to the rumor)?
2. Are analysts or financial news sites adjusting forecasts or coverage based on “unconfirmed” information?
3. Are suppliers, customers, or partners quietly preparing for changes in relationships?
G. Questions to Ask a Contact “In the Know” (Cautiously)
1. “Have you heard whether there’s any truth to the speculation?”
2. “Is there a banker or firm you’ve seen associated with either party recently?”
3. “Do you know if anyone’s been conducting diligence or asking unusual questions?”
The narrative surrounding a potential TSMC-Intel joint venture serves as a valuable case study in the importance of due diligence within the semiconductor industry. As this article has demonstrated through expert analysis and historical context, TSMC's strategic direction strongly favors its independent foundry model. To avoid falling prey to misinformation, analysts, investors, and the media need to adopt a more rigorous approach to evaluating industry rumors. By applying the lessons learned here – understanding the core differences between IDMs and foundries, and utilizing tools like Dr. Thurston's checklist – we can foster a more informed and accurate understanding of this critical sector.