Key Points
- The Trump administration is unlikely to support TSMC’s taking control of Intel’s U.S. chip factories, even though Intel has invested heavily.
- A potential joint entity with TSMC could provide financial relief but require major operational changes, but the involvement could raise concerns.
- Intel recently received a $7.86 billion U.S. government subsidy for domestic chip production.
- If Intel shifts to a fabless model, it could resemble firms like AMD and Broadcom, focusing solely on chip design.
The Trump administration will unlikely support a foreign company operating Intel’s U.S. chip factories. The statement came in response to a Bloomberg report that Taiwan Semiconductor Manufacturing Company (TSMC) was considering taking a controlling stake in Intel’s factories at the request of President Donald Trump’s team.
While the White House encourages foreign investment in the U.S., officials appear hesitant about handing control of a key American chipmaker’s operations to an overseas entity. Bloomberg had reported that Trump’s team had discussed a possible deal with TSMC officials, but it remains unclear whether Intel is open to such an arrangement.
Intel has been struggling to regain its position in the semiconductor industry. The company has lagged in the AI boom and has invested heavily in transforming itself into a contract chip manufacturer, a shift that has yet to materialize. A partnership with TSMC could provide financial relief for Intel but also require major concessions from both parties.
One potential scenario is for Intel to spin its manufacturing operations into a joint entity co-owned by TSMC and other American chip designers. Analysts suggest this could allow Intel to focus on chip design while TSMC manages the factories. However, this approach would require TSMC to reveal some of its proprietary manufacturing techniques, which could be a significant hurdle.
TSMC’s involvement could also raise geopolitical concerns. Intel has been a key beneficiary of U.S. government efforts to bring semiconductor production back to American soil. The company recently secured a $7.86 billion government subsidy to support domestic chip manufacturing. The U.S. has tightened control over semiconductor technology, particularly amid tensions with China.
Analysts note that if Intel moves toward becoming a fabless company—outsourcing manufacturing to TSMC—it could resemble firms like AMD and Broadcom, which focus solely on chip design. However, such a transformation would significantly depart from Intel’s traditional design and manufacturing model of its chips.
