Intel-TSMC Deal: A New Era in Chipmaking?

The Trump administration is unlikely to support TSMC operating Intel's U.S. chip factories. Discussions centered on a potential partnership between the companies, possibly involving joint U.S.-headquartered ownership. Such a venture could aid Intel's manufacturing struggles while TSMC could seek tariff exemptions to make the deal feasible.

The Trump administration probably won't favor the idea of TSMC running Intel's U.S. chip facilities, a White House official has stated. The comment follows a Bloomberg revelation that TSMC might consider controlling stakes in Intel's plants at Trump's behest.

Baird's research note suggests Intel's factories could emerge as a new entity co-owned by Intel and TSMC with support from TSMC engineers, enhancing factory viability. This could provide Intel with significant cash flow relief, aiming to attract key fabless companies for diversified manufacturing.

The venture faces technical and operational challenges as TSMC would need to disclose proprietary techniques to Intel, transforming Intel's manufacturing identity. TSMC's full control of Intel's fabs also questions Intel's strategic shift to become more design-centric, akin to Broadcom, Marvell, or AMD.

(With inputs from agencies.)