A significant development is unfolding in the U.S. semiconductor industry as Intel and Taiwan Semiconductor Manufacturing Co. (TSMC) move toward establishing a joint venture agreement. According to sources familiar with the matter, the preliminary deal would see TSMC acquiring a 20% stake in a new entity that would operate Intel’s chip manufacturing facilities.
The proposed partnership, which has received encouragement from the Trump administration, represents a major shift in America’s
semiconductor landscape. Under the arrangement, TSMC would contribute its manufacturing expertise and provide training to Intel personnel rather than making a capital investment for its ownership stake. The majority shareholding would remain with Intel and other U.S. semiconductor companies.
However, the agreement faces internal resistance from some Intel executives who worry about potential widespread job losses and the subordination of Intel’s existing chip manufacturing technology. The discussions are still ongoing, with no final agreement reached yet.
This potential collaboration aligns with the broader ‘America First’ initiative aimed at rejuvenating domestic chip production capabilities after years of decline. The move also serves strategic defense interests by reducing U.S. dependence on foreign suppliers for semiconductor manufacturing.
The development follows President Trump’s previous criticisms of Taiwan for allegedly appropriating American chip industry expertise. Despite these tensions, TSMC has demonstrated its commitment to the U.S. market through investments exceeding $100 billion.
Recent reports have indicated that TSMC has also explored similar joint venture possibilities with other major players in the
semiconductor industry, including Nvidia, Advanced Micro Devices, and Broadcom, to operate Intel’s manufacturing facilities.
The White House and Commerce Department officials have been actively involved in facilitating negotiations between TSMC and Intel to address ongoing challenges at the American technology giant. Commerce officials have expressed support for the preliminary agreement, according to individuals involved in the discussions.
The strategic implications of this joint venture extend beyond purely business considerations. For TSMC, the arrangement could help neutralize a major competitor while strengthening Taiwan’s negotiating position with the Trump administration, which recently imposed tariffs on various Taiwanese goods, excluding semiconductors.
Earlier this year, analysts at Robert W. Baird noted the Trump administration’s efforts to broker this joint venture between Intel and TSMC, particularly focusing on Intel’s manufacturing facilities, which have been identified as having significant untapped value.
The market has responded positively to these developments, with Intel’s stock price rising 5% in late trading. The company’s shares have gained approximately 16% year-to-date, driven by speculation surrounding the potential deal, despite having previously struggled around the $20 level.
This collaborative effort represents a significant shift in the global semiconductor industry landscape, potentially reshaping the
competitive dynamics between major players while advancing U.S. interests in maintaining technological leadership and security in chip manufacturing. The outcome of these negotiations could have
far-reaching implications for both companies involved and the broader semiconductor industry.