's (NASDAQ: INTC) foundry business recently suffered a major setback after it was revealed that chipmaker Broadcom determined that Intel's newest chip manufacturing process, called 18A, could not execute large-scale production of its chips at the quality standards that Broadcom required. Intel launched its foundry business, which manufactures chips for third parties, in 2021.

While this is disappointing news for Intel, it should be good for rival Taiwan Semiconductor Manufacturing (NYSE: TSM), or TSMC as it is commonly called, and its investors.

For a foundry business to be successful, it needs scale, newer technology, and high utilization rates at its facilities. For Intel, the company's foundry business has struggled with growing revenue and profitability. This can be seen in its second-quarter results. Revenue grew just 4% year over year to $4.3 billion, while its operating loss increased from $1.87 billion to $2.83 billion.

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Source Fool.com