An downed Silicon Valley icon seeking to restore its reputation as America's most well-known semiconductor company, Intel is working with the Trump administration in a plan to hand over the manipulation of chip-making plants to its giant Taiwanese rivals.
Over the past few months, Intel's interim executive chairman Frank Inai said four people about the transaction separating Intel's disease manufacturing from its product design and product business. , spoke with the management staff and leaders of the Taiwan Semiconductor Manufacturing Company. Having knowledge of the plans spoken in an anonymity state.
TSMC, which generates an estimated 90% of the world's most advanced semiconductors, is expected to manage Intel's manufacturing industry and acquire a majority stake in the business along with a consortium of investors, including private equity companies and other high-tech companies. , the four said. .
The Trump administration is encouraging TSMC to make deals. President Trump's candidate for Commerce Secretary of Commerce Howard Lutnick is involved in the conversation and considers one of the most consequential challenges of his new job, and two people familiar with the debate. said.
It is not clear how much money the Taiwanese company will invest in Intel's manufacturing company. The deal can be limited to Intel's domestic factories in states, including Oregon, Arizona and New Mexico, and can include facilities in countries such as Ireland and Israel.
Intel's business outlook has deteriorated after failing to develop smartphones and artificial intelligence chips. Despite the government's best efforts to revive the company by pledging billions of dollars in grants through the Biden administration's Chips Act, Intel continues to struggle.
Intel and TSMC declined to comment. Lutnick did not respond to requests for comment.
Late last year, Intel's board of directors approached TSMC, two people familiar with the talk said, in an effort to assess their interest in a certain partnership. In January, TSMC CEO CC Wei met separately with Lutnick and Yeary to discuss how the partnership works.
Yeary has since spoken to Lutnick about the idea, three of these people said. Intel's Chair's interest in cutting off the company has opened the door for suitors interested in acquiring Intel's product businesses, including Qualcomm. A Qualcomm spokesperson declined to comment.
Some details of the discussion have been previously reported by Digitimes, Taiwanese news outlets, and Bloomberg.
The current question is whether the Trump administration thinks it would be better for a national champion of illness like Inter to be in the hands of foreign companies, or does the administration need to look for another solution? Is that what you're thinking?
“Even staff eager to see the potential support of the US government from the Chips Act and the company's rebound would like to lead the US advanced manufacturing renaissance, the industry.
Hanging in the negotiations are questions about the chip industry and Trump's approach to Taiwan. This is completely different to the strategy of former President Joseph R. Biden Jr. Trump criticizes the Biden administration's investment in domestic chip manufacturing, threatens to impose tariffs on foreign chips, accusing Taiwan of stealing the semiconductor industry from the US, and questioning US military support for the island It was presented. itself against Beijing's invasion.
In a speech to Republican lawmakers in late January, Trump said key tariffs, not subsidies, are everything that needs to be done to tip companies back to the US.
“We want them to come back, and we don't want to give them billions of dollars, like this outrageous program Biden has,” the president said.
At the Senate confirmation hearing on January 29, Rutnick appeared to be walking the cautious line with the tipping program. He described it as “necessary and important,” and described it as a “down payment” by bringing the manufacturing industry back to the US. However, Rutnick refused to be completely committed to honoring the contracts the companies had already signed with the government.
To appease Trump, Taiwanese officials and businessmen have developed relationships with people on track, floating new deals in the gas sector, explaining how Taiwan's semiconductor manufacturing industry will benefit the United States You're about to do so.
Taiwanese officials are also monitoring discussions about Intel's future. For Taiwan, TSMC's advanced chip manufacturing control has become a commentator called “Silicon Shield,” which blocks military action by China and encourages support from the US.
Taiwan's president, Rai Qingte, said Friday that his government will work with the island's semiconductor companies to develop a strategy to address Trump's complaints while protecting Taiwan's role in the chip sector.
“The Taiwanese government will have mutual contact and discussion with the semiconductor sector to develop an appropriate strategy, then further deliberation of the proposal with the US,” Lai said at a press conference.
TSMC can only build more manufacturing capacity in the US and address Trump's demands, said Stacy Rasgon, semiconductor analyst at Bernstein Research. TSMC, which received a grant of up to $6.6 billion from the Chips Act, has the ability to build three factories in Arizona and expand there.
The idea of ​​disbanding Intel speaks of how much the company's fortunes have changed. Founded in 1968, it has become the world's most valuable semiconductor company by designing and manufacturing chips for personal computers and data centers. However, the company has struggled in recent years to innovate and concessions to rivals like Nvidia, the dominant manufacturer of AI chips.
Pat Gelsinger, who was appointed Intel's CEO in 2021, has promised to turn the company around by revitalizing the manufacturing industry, but its efforts have waned. In November, Intel's board of directors forced Gelsinger to resign.
Intel's manufacturing, known as Intel Foundry, reported an operating loss of $13.4 billion in 2024 as sales from customers fell 60%. Last year, the company said it was planning to turn its business into an independent subsidiary.
Patrick Moorhead, founder of technology research firm Moor Insights and Strategy, said that splitting Intel will make it vulnerable to acquisitions as Intel's stock price has fallen almost 50% over the past year. It says it may be possible.
“It's going to cease to exist, as we know,” he said. “It will be the absolute end of the times.”
Chris Buckley I contributed a report from Taipei, Taiwan.
