TSMC may manufacture AI chips for Softbank instead of Intel

SoftBank is reportedly in talks with TSMC to manufacture AI processors for its Project Izanagi, according to the Financial Times. The Japanese tech giant reportedly dropped Intel after the company failed to meet the requirements sought by the project.

Sources at the financial newspaper say SoftBank blames Intel for the end of its negotiations with the Core owner. According to reports, Intel’s chip manufacturing division would not be able to meet SoftBank’s demand in terms of speed and volume of units that the company is seeking.

TSMC, however, doesn’t have much spare machinery to ensure it can meet those demands. The Taiwanese semiconductor giant is already nearing capacity, according to Data Center Dynamics. So there’s still a chance SoftBank could resume talks with Intel if TSMC also isn’t able to supply.

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Project Izanagi is SoftBank’s ambitious attempt to become a competitor and challenge Nvidia’s dominance in the AI ​​market. The initiative first went public in February, with the Japanese tech giant seeking to raise $100 billion to invest. So it’s no surprise that the demand for production is equally high.

Loss of TSMC contract could be a major blow to Intel

Anyone who follows technology news knows that Intel is not having a great year. Between processor failures, loss of value in its shares and mass layoffs, the company is facing difficulties in almost every area in which it operates.

One of the solutions sought by the giant has been to invest in its chip manufacturing capacity, seeking contracts with third parties to help with cash flow. Agreements with Nvidia, for example, have already appeared in rumors.

Losing this SoftBank contract to TSMC, then, could represent the loss of considerable revenue on a huge project. Ironically, SoftBank owns Arm Holdings, a company that Intel recently sold off a significant amount of shares in to recoup capital.