Intel has agreed to sell a 10 percent share in the IMS Nanofabrication business to Taiwan Semiconductor Manufacturing Co.

IMS is valued at about $4.3 billion by TSMC's investment, which is in line with the price at which Bain Capital Special Situations recently purchased a share in the company.

IMS will continue to be majority owned by Intel and run as a separate entity under the direction of CEO Dr. Elmar Platzgummer. The deal is anticipated to be finalized in the fourth quarter of 2023.

When it comes to multi-beam mask writing equipment needed to create advanced extreme ultraviolet lithography (EUV), IMS is the undisputed market leader.

"The investment by TSMC we believe also demonstrates the excitement across the whole semiconductor manufacturing ecosystem for the significant opportunity ahead of IMS," Intel vice president of corporate development Matt Poirier said.

Dr. Kevin Zhang, senior vice president of Business Development at TSMC, said, “TSMC has been working with IMS since 2012 on the development of multi-beam mask writers for advanced technology nodes. This investment continues the long-term partnership between TSMC and IMS to accelerate innovation and enable deeper cross-industry collaboration.”

IMS was bought by Intel in 2015. The Austrian business manufactures a mask, a chip manufacturing component required for the next generation of lithography tools. To keep producing speedier chips, so-called "high-NA" severe UV equipment is required.

To compete with TSMC, Intel is developing a contract manufacturing company called Intel Foundry Services. But according to IMS CEO Elmar Platzgummer, TSMC has been a long-term partner of IMS since about 2011 or 2012. The company also depends on the company's technology.

At the same price, Intel sold Bain Capital a 20 percent share in IMS earlier this year.

"As the industry went to EUV there was only one technical solution leftover to do the mask writing, and a mask is an essential component for chipmaking," Platzgummer said.

The combined investments from Bain Capital and TSMC provide IMS more independence and reaffirm faith in the substantial opportunity that lies ahead of it.