TSMC Gobbles Up $430M Slice Of Intel's IMS Nanofab Unit

TSMC is on a spending spree. The Taiwanese factory goliath just acquired a 10 percent stake in Intel-owned IMS Nanofabrication for $430 million and also announced plans to drop another $100 million on Arm's initial public offering (IPO) this week.

Word of TSMC gobbling up this minority stake in IMS comes just weeks after Intel sold 20 percent of the operatio to Bain Capital. Both deals value IMS at approximately $4.3 billion.

Vienna-based IMS produces tools used in the production of advanced semiconductors. Specifically, it develops multi-beam mask writing tools, including those used in extreme ultraviolet lithography (EUV).

Photomasks are a crucial part of the chip manufacturing process by which nanoscopic features are etched into the silicon wafer. In the early days, photomasks were essentially just a negative of the design engineers were going for. However, as transistor gates have got smaller, creating photomasks that can counteract the effects of distortion at these extreme scales has become a highly valuable capability.

Intel's investments in IMS date back to 2009, well before it acquired the company in 2015. According to Intel, the decision to offer Bain and TSMC slices of the business was motivated by a desire to provide IMS greater autonomy. The logic appears to be that slicing off a chunk of IMS to the likes of TSMC and Bain should make doing business with the company more attractive than when it was solely under Intel's control.

"Being fully owned by Intel was potentially limiting customers for IMS, especially while working on an emerging area like multi-beam mask writing which is relevant for EUV," Gartner analyst Gaurav Gupta previously told The Register.

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TSMC, for its part, has used IMS's multi-beam mask writers in the fabrication of its advanced process nodes going back to 2012. In a statement, Kevin Zhang, SVP of business development at TSMC, said the investment should "enable deeper cross-industry collaboration."

The deal is expected to close sometime in the fourth quarter of 2023.

TSMC eyes $100 million in Arm stock ahead of IPO

In addition to its investments in IMS, TSMC plans to acquire $100 million in Arm stock — between 1.96 million and 2.12 million shares — following its IPO likely this week, the fab giant revealed in a financial disclosure Tuesday.

TSMC was one of several chipmakers, foundry operators, and tech vendors expected to anchor Arm's IPO. AMD, Apple, Cadence, Google, Intel, MediaTek, Nvidia, Samsung Electronics, and Synopsys were also listed as likely investors in a recent regulatory filing.

TSMC's investment in the British chip designer isn't all that surprising. A large portion of chips fabbed on TSMC's advanced and not-as-advanced process nodes are Arm based or compatible, whether they be for notebooks, mobile phones, servers, or embedded devices.

Arm is expected to garner a $52 billion valuation when the stock is listed on the Nasdaq. However, as Bloomberg reports, the hotly anticipated IPO is already oversubscribed by 10 times and the company could still raise the price of the offering to further bolster its valuation.

Bloomberg also reports that it has seen a video Arm CEO Rene Haas has made for investors in which he talks about making "a significant shift in our strategy," by which he means his biz will take a "purpose-built approach" to designing future chip technologies: rather than draw up building blocks of processors – CPUs, GPUs, controllers, etc – to license out to others to stitch together into components, Arm will design more complete blueprints for chip makers to drop onto silicon and ship.

Qualcomm had earlier warned that Softbank-owned Arm was considering switching up its business model to maximize revenue from its designs rather than live off pennies-per-core in royalties. ®