Trump-Led ‘Backlash’ Shakes Stocks: Intel Plummets Amid TSMC News

TSMC’s Massive U.S. Investment Sparks Market Turmoil

Global semiconductor giant Intel saw its stock price take a significant hit, dropping 6.20% to $21.33 (approximately $31) on the New York Stock Exchange, as reported in early March 2025. This sharp decline in Intel’s stock value came on the heels of a blockbuster announcement from Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading foundry for chip production. TSMC revealed plans to pour a staggering $100 billion into new advanced semiconductor manufacturing facilities in the United States, a move that has sent ripples through the tech industry and financial markets alike. Analysts attribute Intel’s stock plunge to this development, suggesting that TSMC’s aggressive expansion into the U.S. market could derail Intel’s strategy to offload its struggling foundry division to the Taiwanese powerhouse. The announcement, championed by current U.S. President Donald Trump, underscores a broader push to bolster domestic semiconductor production, but it appears to have left Intel investors rattled.

The backdrop to this seismic shift began when President Trump hosted a high-profile press conference at the White House, joined by TSMC Chairman and CEO Wei Zhejia and U.S. Commerce Secretary Howard Lutnick. Trump hailed the $100 billion investment as a landmark commitment, describing TSMC as a key player in strengthening America’s economic and national security interests. This investment builds on TSMC’s earlier pledge of $65 billion for U.S. projects, bringing the total to an unprecedented $165 billion, one of the largest foreign direct investments in U.S. history. The funds are earmarked for constructing five cutting-edge chip factories in Arizona, aimed at supporting the booming demand for artificial intelligence and advanced technology applications. For Intel, however, this news has cast a shadow over its plans. Reports had surfaced that Intel was exploring the sale of its foundry business to TSMC, a move seen as a lifeline amid its financial struggles. TSMC’s decision to independently expand its U.S. footprint has raised doubts about the likelihood of such a deal, triggering a sell-off among Intel shareholders.

Intel’s stock had experienced a rollercoaster ride in the weeks leading up to this downturn. Just last month, on February 18, 2025, shares surged 16% in a single day, the biggest daily gain in five years, fueled by optimism over a potential partnership or acquisition by TSMC. That rally reflected investor confidence in Trump’s efforts to revive Intel by leveraging TSMC’s expertise, possibly through a merger or technical collaboration. The current administration has made no secret of its desire to bring semiconductor manufacturing back to American soil, a policy rooted in both economic competitiveness and geopolitical strategy amid tensions with China. TSMC’s latest move aligns with this vision, but it also intensifies competition for Intel, which has struggled to keep pace in the foundry space dominated by TSMC. With TSMC now committing to its own massive U.S. expansion, the prospect of absorbing Intel’s foundry operations seems less appealing, leaving Intel to face an uncertain future in a rapidly evolving market.

Delving deeper into the implications, TSMC’s $100 billion investment is more than just a financial flex; it’s a strategic play with far-reaching consequences. The new Arizona facilities are expected to create thousands of high-tech jobs and position the U.S. as a hub for next-generation chip production, critical for everything from smartphones to military hardware. This aligns with Trump’s aggressive stance on reshoring critical industries, a policy that has gained traction through measures like the CHIPS Act and targeted incentives for foreign firms. For TSMC, the investment also serves as a hedge against geopolitical risks, particularly as U.S.-China relations remain strained. By bolstering its presence in the U.S., TSMC secures its role as a vital supplier to major clients like Apple and Nvidia, while reducing reliance on its Taiwan-based operations. Yet, for Intel, this shift amplifies competitive pressures. Once a titan of the semiconductor world, Intel has lagged behind TSMC in adopting cutting-edge manufacturing processes, and its foundry ambitions have stumbled amid operational challenges and declining market share.

What makes this development particularly intriguing is the broader context of Trump’s semiconductor strategy. His administration has leaned heavily on TSMC to bolster U.S. capabilities, even as it seeks to prop up domestic players like Intel. The $165 billion total investment from TSMC dwarfs previous commitments and signals a long-term bet on America’s tech future. However, it also exposes the delicate balancing act Trump must navigate: empowering foreign giants to meet immediate needs while ensuring American firms aren’t left behind. Intel’s 6.20% stock drop reflects investor unease over this dynamic, with many questioning whether the company can pivot effectively without TSMC’s direct support. Some speculate that TSMC might still consider a partial stake in Intel’s foundry business, perhaps as a minority investor, but the Taiwanese firm’s focus on its own U.S. expansion suggests such a scenario is far from certain.

For those tracking long-tail trends like “Intel stock price decline March 2025” or “TSMC U.S. investment impact on semiconductor market,” this moment underscores the volatility of the tech sector amid policy shifts. Intel’s earlier 16% surge in February hints at how quickly sentiment can swing, driven by rumors of TSMC tie-ups or government intervention. Now, with TSMC forging ahead independently, Intel faces a stark reality: adapt to a fiercely competitive landscape or risk further erosion of its market position. The broader tech ecosystem, too, stands to feel the ripple effects, as TSMC’s enhanced U.S. presence could reshape supply chains and pricing dynamics for years to come. Investors and industry watchers will likely keep a close eye on how Intel responds, whether through internal innovation or renewed negotiations with TSMC, as Trump’s vision for a revitalized American semiconductor industry continues to unfold.