TMTPOST -- Taiwan Semiconductor Manufacturing Co. Ltd (TSMC) could proceed with a plan to take over Intel Corporation’s foundry business under the pressure from the Trump administration, which is ramping up efforts to restore U.S. manufacturing.
Credit：Intel
TSMC has pitched a group of semiconductor companies including Nvidia Corporation, Advanced Micro Devices, Inc. (AMD) and Broadcom Inc. on running Intel’s foundry business through a potential joint venture, Reuters reported on Wednesday, citing four sources. It was said TSMC initiated discussions with the later three American companies and the talks are in an early stage. The reported venture will operate Intel’s segment that is responsible for building chips for both the company and third party contractors.
Under TSMC’s proposal, the world’s top semiconductor foundry, would be the only operator of Intel’s foundry factories that is based outside U.S. and hold not more than 50% of the potential venture, considering U.S. President Donald Trump has implied discomfort with foreign entities’ ownership of American companies, per the report. If the report is accurate, Nvidia, AMD and Broadcom are likely to be other operators of the potential venture and get stakes in it.
Share of these aforementioned companies listed in the United States rose on Wednesday following the report. Nvidia shares closed 6.4% higher, and AMD, TSMC and Broadcom gained 4.2%, 3.6% and 2.2%, respectively.
The reported TSMC move is seemed as a response to the request from the Trump administration to revive Intel while maintaining American control. For Trump, who aims to make America great again, to boost Intel can help move production back U.S. and make the country a leader in the advanced chipmaking. Intel is the largest chip manufacturer of the United States. The country marks up just 12% of the global chip production, down from 37% in 1990.
Trump has been reportedly pressuring TSMC to take over and manage Intel’s plants. The DigiTimes reported late February that the U.S.government has offered TSMC three options. Under the first proposal, that TSMC would build an advanced packaging facility in the US, offering integrated services from wafer manufacturing to back-end processing locally. The second involves a joint venture led by the U.S. government. It requries TSMC along with several major companies to invest in Intel’s standalone foundry business under a joint venture, and the venture would facilitate a technology transfer from TSMC. The last proposal is to allow Intel to assume future packaging contracts from U.S. customers that TSMC has secured, such as like Apple Inc., leveraging Intel’s advanced packaging capabilities.
Amid the Trump administration’s drive to reinforce the domestic “Made in America” policy and implement measures to ensure Intel’s survival, TSMC is being cited as virtually the only solution, according to industry sources.
Trump on March 3 announced TSMC will invest $100 billion in boosting U.S. chip manufaturing. The company then confirmed it plans to expand its investment in advanced semiconductor manufacturing in U.S. by additional $100 billion. That will bring its total investment in the country to $165 billion. TSMC said the expansion includes plans for three new fabrication plants, two advanced packaging facilities and a major R&D team center. It expected the expanded investment would support 40,000 construction jobs over the next four years and create tens of thousands of high-paying, high-tech jobs in advanced chip manufacturing and R&D.
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