TSMC is not planning to take over Intel’s chip factories. The idea was only suggested by the US government to help Intel out of its difficulties.
“We are not in discussions with other companies about a joint venture.” TSMC CEO CC Wei needs no more words to draw a line through the rumors that the company would join forces with Intel. A joint venture in which TSMC would take over at least part of Intel’s factories, therefore, does not seem to be on the agenda.
The rumors began to grow louder at the beginning of this month. Intel has been in troubled waters for some time, and a potential spin-off of the Intel Foundry division seems a logical step. In the proposed plan, TSMC would acquire about 20 percent of Intel’s factories. TSMC had never confirmed these plans and now even vehemently denies them.
Spin-off
Intel is an important customer, but at the same time a competitor of TSMC. Intel is the last major chip maker that fabricates its own designs. AMD divested its production factories years ago. In recent years, Intel has struggled greatly to keep up with TSMC’s production techniques, causing the big fish to knock on TSMC’s door.
However, you don’t just take over chip factories. Intel’s factories are specialized for the company’s own processes. So it’s not like TSMC can suddenly produce designs from its own customer in an Intel factory. That’s why TSMC is opting out of a joint venture with Intel: converting the factories could end up being more expensive and take longer than building new factories.
TSMC is busy building factories in the United States. By 2028, the Taiwanese chip giant hopes to open a new site in the state of Arizona, to ramp up production on American soil in full force from the next decade. The factory in Arizona will be a generation behind the headquarters in Taiwan. TSMC will also come to Germany, but there they would mainly produce less advanced chips for industrial applications.
Pressure from Trump
Wei clarifies where the rumors come from. TSMC has reportedly been asked multiple times by the US government to partner with Intel. The US views Intel’s troubles with dismay. A spin-off where the majority remains in Intel’s hands would ensure the production of advanced chip technology on American soil, according to the government’s ideal scenario.
Trump still has other tricks up his sleeve to put pressure on TSMC. After all, TSMC risks getting caught up in the ‘tariff war’ between China and the United States. Despite the political pressure, TSMC remains optimistic. The company currently sees no reason to adjust its growth forecast of 25 percent for this year. “We are aware of the potential impact of tariffs on demand, but so far we see no change in our customers’ behavior,” Wei said.
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