The US has reportedly provided TSMC with alternatives on how the company will proceed with its business in the nation, including co-existing with Intel as a foundry business.
Trump Administration Looks Keen To Put Intel Foundry Back To Its Feet; Urges TSMC To Form A Strategic Partnership
It seems like the Trump administration won't let TSMC go away that easily, as it looks determined to promote the "Made In USA" narrative. According to @Jukanlosreve, citing a report from DigiTimes, the US government has apparently given TSMC three different alternatives, dictating how the Taiwan giant could ensure its presence in the US markets, and it mainly includes promoting US semiconductor domestic production, and most importantly, uplifting Intel from the ashes.
DIGITIMES: Three proposals the United States has presented to TSMC.
1. TSMC would build an advanced packaging facility in the US, offering integrated services from wafer manufacturing to backend processing locally.
2. Under a joint venture (JV) proposed by the US government,…— Jukanlosreve (@Jukanlosreve) February 13, 2025
One of the propositions has already been discussed in a previous post, which includes TSMC opening up an advanced chip packaging facility in the US that will likely pave the way for the semiconductor giant to shift its reliance away from Taiwan. However, the other two alternatives are most interesting to look at, with one of them recommending that TSMC invest in Intel Foundry and potentially be involved in a technology transfer, which would mean that the Taiwan giant would lose its market dominance.
TSMC has been strictly against technology transfer and even initially resented manufacturing cutting-edge processes in the US, but ultimately changed its stance. Given that TSMC invests in the IFS, that would mean that the Taiwan giant would see its market stance getting overshadowed, which it certainly cannot afford for now. To top off, TSMC's technologies are different from what IFS is following, in terms of implementation and techniques; hence this proposal means a complete revamp from ground zero for Intel Foundry.
The third proposal says that TSMC would shift its US-based orders towards Intel Foundry, and with this, customers like Apple would now need to place orders at the IFS, instead of TSMC, driving away a major revenue portion. This means a significant blow to the Taiwan giant's revenue streams, considering that US companies account for a major portion of the company's chip orders. Diverting them towards IFS would basically mean that not only will TSMC lose its key customers, but it is still uncertain about whether Intel could deliver the same quality and performance as TSMC, making the situation difficult for clients.
The key thing to note with all these suggestions is the inclination towards Intel Foundry and how the Trump administration is determined to take the division back to glory, even if it means compromising TSMC's performance. So, the hype is definitely with Intel, and Team Blue now needs to nail its 18A process to further boost the "Made In USA" narrative, ultimately forcing TSMC to opt for the above-mentioned options.
About the author: Muhammad Zuhair is a hardware and technology reporter for Wccftech, specializing in the semiconductor industry and the complex interplay between technology, manufacturing, and geopolitics. His coverage focuses on the corporate strategies and technological roadmaps of industry giants like TSMC, NVIDIA, Samsung, and Intel. Zuhair's expertise lies in deconstructing complex topics such as fabrication nodes (e.g., 2nm process), the economic impact of policies like the CHIPS Act, and the strategic development of AI infrastructure from NVIDIA, AMD and Intel.
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