TSMC in dilemma as US pushes ‘Made in USA' strategy with Intel

Yahoo

16-02-2025

The U.S. government is looking to shift from TSMC as a major supplier of the nation's technological components to relying on parts made by American companies.
The company, Taiwan Semiconductor Manufacturing Co Ltd is one of the premier component suppliers in the world. It particularly partners with many U.S. brands, using its ever-advancing manufacturing processes to build the semiconductors that power many of the electronics that we use today. However, the Trump Administration is adamant about pushing forward a 'Made In USA' ethos when it comes to developing products moving forward.
Tech informant, @Jukanlosreve detailed; referencing the Taiwanese publication DigiTimes, that the U.S. government has given TSMC three alternatives to retain business within the country. Ultimately, the plan would meld TSMC from an international corporation to one with the U.S. as its domestic home base, in addition to assisting the U.S.-founded Intel Foundry in gaining traction in the industry.
The first option proposes that TSMC establish a packaging facility stateside. This would be a major step toward the U.S.' aim of not having to rely on international resources. However, TSMC has already been slow to consider this option due to 'labor shortages and low-profit margins,' Jukanlosreve noted.
The second option proposes a joint venture between TSMC and Intel Foundry, in which TSMC and other companies would invest in Intel financially, and there could be a potential technology transfer of TSMC's company and intellectual property. The Taiwanese manufacturer is strongly against this option as it could take TSMC out of the semiconductor market, potentially to put Intel Foundry in its place. Wccftech noted that TSMC and Intel use different manufacturing technologies, suggesting a refreshed Intel would need to develop a new manufacturing process.
The third option proposes that Intel Foundry move forward as the main supplier for all U.S. partners. Once again, this option puts TSMC at risk of losing, not only its customers but its mainstay in the industry.
This news among various reports sent Intel stock up in recent days, with shares trading at 29.2% on Thursday and seeing a four-day positive streak, according to Dow Jones Market Data. The spike came after Vice President J.D. Vance spoke at an artificial intelligence summit in Paris earlier this week, about bringing semiconductor manufacturing to the U.S. being an important goal of the new administration. He noted that Intel stood to benefit from any plans the government has given it is the country's largest chip manufacturer, according to Market Watch.
Also noting the speculation of the government proposing a joint venture between TSMC and Intel's foundry business, some analysts believe the Trump administration will continue to promote the U.S. Chips Act so it can get its plans of funding and building U.S.-based chip plants in action.
They add that Intel Foundry has positives and negatives. Once part of Intel's hardware business, it was eventually separated into its own entity. While it has yet to sign on any major customers, it is one of the only U.S. semiconductor manufacturers that produces chips domestically, according to TechInsights vice chair, G. Dan Hutcheson.
The industry has heard speculations of the government's plans; however, it is also privy to both Intel and TSMC's upcoming manufacturing processes; with Intel's being the 18a and TSMC the 2nm, or two-nanometer process. Analysts including TechInsight's, Scotten Jones have compared the two processes and determined that Intel's 18a performed better.
While all the reports remain speculative, the spotlight will certainly now be on both Intel and TSMC.