Taiwan Semiconductor Manufacturing Company (NYSE: TSM) is reportedly considering a stake in Intel’s (NASDAQ: INTC) struggling U.S. factories, a move prompted by the Trump administration’s push to strengthen domestic chip production.
Last week, multiple news sources, including the Wall Street Journal and Bloomberg, indicated that the discussions are still in early stages, but TSMC has expressed some openness to the deal. The company already has a major foundry in Arizona, which it plans to expand, and this potential deal could complement those efforts.
Intel, which has been losing market share and struggling with a costly foundry business, may welcome external support, but TSMC is not the only company involved in the talks. Broadcom Inc. (NASDAQ: AVGO) is also reportedly in the running to take over Intel’s U.S. manufacturing sites.
However, challenges remain. A Reuters report suggests President Donald Trump may hesitate to allow a foreign company to control critical U.S. chip manufacturing facilities. This concern could complicate the negotiations, despite government support for increasing U.S. chip production.
US Expansion to Be Driven by Demand, Shareholder Needs Over Intel Rescue – Morgan Stanley
Analysts at Morgan Stanley caution that while the U.S. government may encourage Taiwan Semiconductor Manufacturing Company (NYSE: TSM) to support (NASDAQ: INTC), the company’s decision to expand in the U.S. will likely be driven by market demand and the need to meet shareholder expectations rather than an effort to rescue Intel. TSMC is focused on mitigating tariff risks in the U.S., and analysts believe the company will prioritize expanding its U.S. production to offset potential tariff impacts. However, it was unclear whether Intel would play a role in TSMC’s U.S. growth strategy.
As the world’s largest contract chipmaker, TSMC is a vital supplier for companies like Nvidia (NASDAQ: NVDA), and its expansion in the U.S. could help meet the growing demand for semiconductors, especially in the AI sector.
JPMorgan: Joint Venture Unlikely, But U.S. Expansion Expected
JPMorgan analysts believe a joint venture between TSMC and Intel is unlikely unless significant financial subsidies are offered. The White House’s reluctance to allow such a deal could further hinder the possibility of a partnership. Still, analysts agree that TSMC is likely to continue expanding its U.S. foundries, especially with its existing growth plans in Arizona.
JPMorgan estimates that TSMC could invest over $100 billion in U.S. facilities over the next 5-10 years. The company’s expansion will largely depend on continued support from the U.S. CHIPS Act, which has already played a pivotal role in TSMC’s Arizona expansion.
Intel NASDAQ: INTC NYSE: TSM Taiwan Semiconductor Manufacturing Company TSMC
