Reports citing unnamed sources say Taiwan-based TSMC is being urged by the Trump administration to invest 20% in Intel Foundry Services. Doing so would reduce the possibility TSMC could face steep tariffs on its products sold into the US.
The TSMC 20% investment proposal surfaced several days ago and appears to be one of three proposals to TSMC from the Trump administration. Its impact appears to have caused Intel shares to soar in recent days, up 16% on Tuesday and up 37% over the previous five days, topping $27 at close on Tuesday. (Intel shares dropped 5% at Wednesday market open, along with a drop in the Nasdaq.)
“This is the only arrangement [for Intel] that makes sense,” Patrick Moorhead, chief analyst and founder of Moor Insights & Strategy, told Fierce on Tuesday. Moorhead had defended the 20% investment by TSMC in IFS in comments on X, after saying an earlier idea for TSMC to take over the entire Intel foundry business separate from Intel would spell the end of Intel.
Whether a 20% TSMC investment in Intel Foundry makes sense to TSMC is another matter, according to other analysts. "There are definitely these discussions happening, but I'm skeptical about the gain for TSMC [for a 20% investment in IFS] other than tariff or tax relief," said Mario Morales, long-time semiconductor analyst at IDC. He said TSMC would probably want some benefit from whomever acquires Intel-designed chips. "TSMC does not gain with Intel, or by appeasing the current administration," he added.
Morales also said the Trump administration is "putting pressure" on TSMC to take a stake in Intel. He also said Broadcom and another dark horse have been in discussions to acquire part of the Intel Products Business Unit, separate from the foundry business.
Some background on the TSMC-Intel proposition
The New York Times, citing four unnamed officials, on Feb. 14 had reported Trump officials were working with Intel and Frank Yeary, interim Intel chairman, on a plan to turn over the operation of IFS chip-making plants to TSMC.
Howard Lutnick, confirmed by the US Senate as Commerce Secretary on Tuesday in a 51-45 vote, has also been involved in the conversations with Intel and TSMC, according to reports.
The White House, Commerce Department, Intel and TSMC had no comment.
TSMC is already making progress on building new chip fabs in the US and is a recipient of billions in grants under the US CHIPS and Science Act. However, the Trump administration has threatened broad tariffs on goods entering the US across many industries, including on semiconductors from Taiwan.
Meanwhile, President Trump and Vice President Vance have issued statements in recent days about the importance of securing both chip design and fabrication in the US as part of the administration’s Made in America thrust. Intel, also a major US CHIPS grant recipient, is the only US-based company doing both advanced chip design and chip fabrication.
Intel Foundry Services operates at a loss and is expected to become revenue neutral in late 2027 as it encourages chip designers to use its 18A and 14A chip dies to support their latest products. Moorhead believes the Trump administration is likely suggesting multiple chip designers make use of IFS, including Nvidia, Broadcom, AMD and Marvell.
“Taiwan took our chip business away,” President Trump said on Feb. 13. “We had Intel, we had these great companies that did so well, and it was taken from us and we want that business back.”
Whether a deal emerges for TSMC to invest 20% or some amount in IFS, it isn’t clear what the timeline would be.