Taiwan semiconductor company TSMC is reportedly considering acquiring a part of Intel’s stake in the U.S. or cooperating in the form of a joint venture at the request of the Donald Trump administration. The Trump administration seems to be pressing TSMC to solve Intel’s technical and financial difficulties, which have recently been experiencing an unprecedented crisis.
In summary, the U.S. and Taiwanese media reported on the 16th, the U.S. government met with TSMC management on the 12th (local time) to suggest ways to collaborate with Intel. Specifically, it is said that they discussed technical cooperation with Intel, the formation of a joint venture, and entrusting the post-process of products to be supplied to customers in the U.S. to Intel factories.
It is still unclear how much money TSMC will spend to acquire Intel’s business. Officials said that production facilities subject to acquisition may be limited to Intel’s factories in the U.S., such as Oregon, Arizona and New Mexico, or even include facilities outside of the country such as Ireland and Israel.
The establishment of a joint venture is also being discussed. “Intel will split its wafer foundry division and then switch to a joint venture with TSMC,” U.S. investment firm Baird said in a report. “TSMC will provide expertise to some semiconductor engineers and help them take charge of 3 nanometers and 2 nanometers processes in the U.S..”
The deal is a huge loss for TSMC. TSMC, the world’s No. 1 foundry company, already monopolizes orders from big tech customers such as Nvidia and Apple, so there is no reason to work with Intel. Rather, concerns over technology leakage are growing. Liu Fei-chen, a researcher at the Taiwan Economic Research Institute, told a local media outlet that collaborating with Intel in the form of a joint venture is a worse option than imposing tariffs on semiconductors from Taiwan.
Intel’s crisis is behind it. Once a powerhouse in the CPU market, Intel has lost control of its competitors such as AMD as it failed to respond to changes in the smartphone-oriented market since the mid-2000s. It entered the foundry business in 2021, but has yet to narrow the gap with leading companies such as TSMC and Samsung Electronics. Last year, Intel recorded a net loss of 19.2 billion dollars. Intel is also mentioned in the market for mergers and acquisitions.
The TSMC’s acquisition of Intel’s stake was also rumored to be in this context. If the Trump administration succeeds in pressuring TSMC to acquire Intel’s manufacturing division, it will be able to kill two birds with one stone: improving Intel’s financial situation and protecting jobs, a symbol of U.S. semiconductors.
The collaboration between TSMC and Intel was also discussed during former President Joe Biden’s term. At the time, the Biden administration reportedly proposed licensing manufacturing technology for TSMC to use in Intel factories.
JENNIFER KIM
US ASIA JOURNAL
