Taiwan's TSMC Considers Acquiring and Operating Intel's U.S. Semiconductor Plants Amid Trump Pressure

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TSMC explores partnership with Intel as part of broader efforts to bolster U.S. semiconductor production

The Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker, is reportedly considering acquiring and operating semiconductor plants owned by U.S.-based Intel. This move comes in response to pressure from the administration of former U.S. President Donald Trump, who has pushed for greater semiconductor manufacturing in the United States. Bloomberg News reported on February 14, citing reliable sources, that discussions between Trump’s team and TSMC officials recently took place, with TSMC showing receptiveness to the idea of a potential collaboration with Intel.

While the specifics of the partnership remain unclear, sources indicated that TSMC may ultimately take full control of Intel's semiconductor manufacturing facilities in the U.S. The plan could also involve TSMC acquiring a controlling stake in Intel, with the U.S. government and major semiconductor design companies possibly offering support. This arrangement could be a crucial lifeline for Intel, which has faced challenges in keeping up with the rapidly evolving semiconductor industry.

Intel, once a dominant force in the global semiconductor market, has struggled to adapt to the growing demand for chips used in mobile devices, particularly smartphones. It has also fallen behind companies like Nvidia in the artificial intelligence (AI) chip sector. As a result, Intel’s financial performance has suffered, prompting the company to announce a large-scale restructuring plan that included laying off 15% of its workforce.

As TSMC and Intel navigate potential collaboration, significant adjustments will be required from both parties. Chip manufacturers operate with distinct processes and technologies, meaning that Intel may need to undergo substantial operational changes. For TSMC, there are concerns about the potential leakage of proprietary technologies when managing Intel’s factories.

This collaboration was also explored during the presidency of Joe Biden, as part of broader efforts to secure U.S. semiconductor production. Trump has long advocated for policies emphasizing domestic manufacturing, particularly in the semiconductor sector, which is crucial to a range of industries, including technology and defense. In a statement made on February 13, Trump called for the U.S. to bring more semiconductor manufacturing back to the country. He pointed out that while the majority of chips used in the U.S. are produced in Taiwan, with some also sourced from South Korea, there is a strong desire for these companies to set up operations within the U.S.

In response, the Taiwanese government convened a high-level National Security Council meeting under President Tsai Ing-wen's leadership on February 14. The meeting focused on discussing potential measures to enhance Taiwan's trade cooperation with the U.S. and mitigate the impact of these developments on Taiwan's semiconductor industry. The Taiwanese government has emphasized its commitment to strengthening economic and technological ties with the U.S. while safeguarding its national interests in the semiconductor sector.

If the deal between TSMC and Intel proceeds, it could significantly change the dynamics of the global semiconductor market, with far-reaching implications for both companies and the industry as a whole.

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