US Offers TSMC Three Proposals for Future Operations, Including Potential Technology Transfer to Intel

Recent reports indicate that the United States government has presented TSMC with strategic options regarding its operations within the country. These alternatives include collaborating with Intel as a foundry business, aiming to bolster domestic semiconductor production.

Strategic Alliances: US Government Encourages TSMC to Collaborate with Intel

The Trump administration is making significant efforts to maintain TSMC’s presence in the United States, driven by a desire to enhance the “Made In USA”initiative. According to a tweet from industry insider @Jukanlosreve, which references a report from DigiTimes, the government has proposed three strategic pathways for TSMC to assure its foothold in the US markets. This includes a focus on advancing domestic semiconductor manufacturing and revitalizing Intel’s foundry operations.

DIGITIMES: Three proposals the United States has presented to TSMC.

1. TSMC would build an advanced packaging facility in the US, offering integrated services from wafer manufacturing to backend processing locally.2. Under a joint venture (JV) proposed by the US government, …

— Jukanlosreve (@Jukanlosreve) February 13, 2025

One of the proposed strategies involves TSMC establishing an advanced chip packaging facility within the United States. This initiative could facilitate the company in reducing its dependency on Taiwan. However, the other two options warrant closer examination. One recommendation involves TSMC investing in Intel Foundry as part of a technology transfer, a move that could threaten TSMC’s current market leadership.

Historically, TSMC has expressed resistance to technology transfers and showed reluctance towards utilizing state-of-the-art manufacturing processes outside of Taiwan. Nonetheless, recent investments in Intel Foundry Services (IFS) suggest a possible shift in this stance. Should TSMC truly engage with IFS, it risks diminishing its competitive position, particularly as TSMC’s technological methodologies differ markedly from those employed by IFS. Adopting different standards would require a comprehensive restructuring of Intel’s foundry capabilities.

The third proposal puts forth that TSMC would steer its US-based orders towards Intel Foundry. This shift could compel notable clients, such as Apple, to place their chip orders with IFS rather than TSMC. Such a realignment would substantially impact TSMC’s revenue, as US companies constitute a significant portion of its order base. This strategic move carries the potential to not only alienate TSMC’s major clients but also raise concerns about whether Intel can replicate TSMC’s quality and performance, complicating the landscape for these customers.

Crucially, it’s clear that these proposals illustrate the U. S.government’s commitment to refreshing Intel Foundry’s reputation, even at the expense of TSMC’s competitive edge. The spotlight is now firmly on Intel, which must succeed with its upcoming 18A process to reinforce the “Made In USA”narrative and drive TSMC towards reconsidering its business strategies.

Source & Images