US gov't pushing TSMC and Intel to create joint venture in the US: Report
Intel and TSMC do not comment, though.

A Wall Street analyst's speculation suggests that the U.S. government is pushing Intel and TSMC to form a joint chip production venture, which would be owned by the two companies and operated by TSMC.
According to a Wall Street Journal report, the U.S. government wants TSMC to apply its experience with high-volume manufacturing using EUV lithography to Intel's process technologies. Another rumor cited by the Financial Times points to TSMC's accelerated Arizona Fab 21 complex expansion.
A weird rumor
"There are discussions from the Asia supply chain that the U.S. government will get involved in potentially the following: TSMC would send engineers to Intel's 3nm/2nm fab, applying the company's know-how to ensure that the fab and subsequent manufacturing projects from Intel become viable," Tristan Gerra, an analyst with Baird, wrote in a note sent to clients (via @WallStEngine). "The fab could be spun off into a new entity jointly owned by TSMC and Intel, and run by TSMC. The new entity would receive U.S. Chip Act funding."
Although Tristan Gerra admits there are no confirmations of the rumors and that the project could take a long time to materialize, the strategy apparently appears logical to analysts. If implemented, Intel's financial pressures would be eased, and it could shift its focus toward chip architecture and platform solutions. Also, Intel would retain its manufacturing capacity, aligning with the strategy set by former chief executive Pat Gelsinger. Additionally, an operational and competitive fabrication facility could draw major chip designers seeking a stable and geographically secure manufacturing alternative, which would ensure the utilization of the fab.
The rumor is odd, raising both business and technology concerns. Let’s start with the technology — two ways for semiconductor producers to “share know-how” would be by helping each other tune equipment for a particular process technology (or technologies, as Intel 3-capable fabs are likely also capable of 18A), or porting an established production node to a new fab.
Technology concerns
TSMC engineers are unfamiliar with Intel’s EUV-based fabrication processes and process recipes, so their ability to tune anything will be limited, or take months. Meanwhile, Intel’s 3nm node is in mass production, and the 18A manufacturing technology will enter high-volume manufacturing a few months later. Based on what Intel says about 18A, this process does not need further tuning, especially not adjustments made by external engineers.
Porting TSMC’s fabrication technologies to an Intel fab in the U.S. is challenging. Even though Intel and TSMC fabs might use EUV lithography, each has unique tool setups, fab configurations, and vendor-specific modifications. For example, ASML’s lithography machines typically feature custom calibrations and/or additional modules that suit the chipmakers' respective processes. Also, Intel and TSMC have different etch recipes, deposition sequences, and step-by-step controls, which usually affect tools.
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Fabrication processes depend on carefully vetted materials with strict purity and composition requirements. Even small changes in photoresist or etch chemistries can introduce defects or cause process drift. Moreover, TSMC’s approved chemical suppliers and their formulations differ from Intel’s, and it is not guaranteed that the raw materials used by TSMC can effectively be used on Intel’s tools.
Even minor variations in temperature controls, gas flows, or photomask handling can cause significant drift in line widths, transistor characteristics, and yields, making porting complex, expensive, or financially unfeasible.
Business concerns
On the business side of the issue, TSMC has no interest in helping Intel improve its EUV fabrication technologies as Intel is a rival. The company also does not need to form a joint venture with Intel, as it could impact its gross margins. The only motivation for TSMC to work with Intel would be to avoid potential tariffs introduced by the Trump administration, which could require TSMC to produce advanced chips on its N3 (3nm-class) and N2 (2nm-class) process technologies in the U.S.
However, Intel is unlikely to have enough EUV production capacity in America to meet demand for its products and products from TSMC’s customers. To that end, accelerating the adoption of N3 and N2 in TSMC's own Arizona fabs, as reported by the Financial Times citing industry analysts, makes far more business sense.
For Intel, working with TSMC also seems impractical. It is unlikely that TSMC engineers can help significantly improve Intel 3nm and 18A process technologies. However, porting TSMC nodes to fabs in the U.S. means that Intel’s fabs in Ireland and Israel would be the only facility to use Intel’s nodes.
Yet, it is unlikely that these sites will be financially viable in the long run, as process technologies cost billions to develop, and the more chips a company produces using a single node, the better. For obvious reasons, TSMC is hardly interested in porting its advanced nodes to Intel facilities in Ireland and Israel, even as part of a joint venture, as this could create overcapacity for its fabrication technologies.
Thoughts
Ongoing geopolitical turmoil, coupled with Intel's financial and execution struggles, have generated various rumors surrounding the blue giant. In this case, significant technological and business hurdles — ranging from differences in tooling process recipes at Intel and TSMC to TSMC's lack of incentive to aid a competitor — cast doubt on the feasibility of such a partnership.
Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.
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bit_user Maybe TSMC would be willing to buy and operate Intel's fabs? That's about the only semi-realistic option that I can see that involves both companies.Reply
IMO, it'd be really sad if IFS effectively gets subsumed by TSMC, one way or another. Intel is a US company, TSMC isn't. No other leading edge fab is (i.e. Samsung and Rapidus). Well, there's Micron, but they only make DRAM and NAND.
Not in a meaningful way. The whole point was to expand their fabs into something that would compete with TSMC, not get run by it. In this scenario, probably the bulk of their fab revenue would just go to TSMC, since it's almost certain what TSMC would do is just bring over their own nodes (maybe in addition to running Intel's existing nodes, but Intel probably doesn't need help with that).The article said:Also, Intel would retain its manufacturing capacity, aligning with the strategy set by former chief executive Pat Gelsinger. -
Gururu
There is absolutely no way the administration would let a foreign entity monopolize fabrication in the U.S.bit_user said:Maybe TSMC would be willing to buy and operate Intel's fabs? That's about the only semi-realistic option that I can see that involves both companies.
IMO, it'd be really sad if IFS effectively gets subsumed by TSMC, one way or another. Intel is a US company, TSMC isn't. No other leading edge fab is (i.e. Samsung and Rapidus). Well, there's Micron, but they only make DRAM and NAND.
Not in a meaningful way. The whole point was to expand their fabs into something that would compete with TSMC, not get run by it. In this scenario, probably the bulk of their fab revenue would just go to TSMC, since it's almost certain what TSMC would do is just bring over their own nodes (maybe in addition to running Intel's existing nodes, but Intel probably doesn't need help with that). -
bit_user
Yeah, that's why I said only "semi-realistic".Gururu said:There is absolutely no way the administration would let a foreign entity monopolize fabrication in the U.S.
None of the other options seem any more realistic to me, as I don't expect TSMC has any interest in transferring its technology, IP, or expertise to anything owned by Intel. -
Gururu Intel stock up 20% last few days, not sure if people are excited because of prospect of experienced TSMC coming aboard or purely on the idea that Intel is pretty much going to be making all government CPUs/NPUs during this administration.Reply
I think it's pretty clear, however it pans out, that the government (as would any for its own) wants Intel (or purely its fab), at this point in time, to be the go to supplier for national projects. Wall street speculation could simply be market manipulation and seems untethered to any reliable sources for now. I would be gobsmacked if TSMC took on a role beyond government managed consulting. -
bit_user
As mentioned, TSMC has fabs in the USA. AMD is one of its customers, presumably for their Zen 5 CCDs which seem like they could be made there.Gururu said:... Intel is pretty much going to be making all government CPUs/NPUs during this administration.
Also, I wouldn't be so sure the government cares that much where the CPUs are made. Tariffs seem to be the main tool they want to use for coercion. A lot of government computing has already migrated to the cloud, and I'd guess they tend to just use the cheapest option there, even if it's ARM.
IMO, it's mainly for military systems where they actually care in such detail about the entire supply chain. -
Gururu
It will be interesting to see if 'Made in America' continues to satisfy national interests when not 'Owned by America'.bit_user said:As mentioned, TSMC has fabs in the USA. AMD is one of its customers, presumably for their Zen 5 CCDs which seem like they could be made there.
Also, I wouldn't be so sure the government cares that much where the CPUs are made. Tariffs seem to be the main tool they want to use for coercion. A lot of government computing has already migrated to the cloud, and I'd guess they tend to just use the cheapest option there, even if it's ARM.
IMO, it's mainly for military systems where they actually care in such detail about the entire supply chain. -
Pierce2623
The only way I’d see this cooperation working is if the joint venture was actually for a new node. Maybe either a much lower cost versions of leading edge nodes or just simply a new leading edge node. I have little doubt that TSMC and Intel both have enough engineering talent that a combination of their best people would almost certainly outperform anything either company can do all on its own.bit_user said:Yeah, that's why I said only "semi-realistic".
None of the other options seem any more realistic to me, as I don't expect TSMC has any interest in transferring its technology, IP, or expertise to anything owned by Intel. -
bit_user
Well, Intel and Samsung announced some sort of partnership, back in late October of last year. I wonder what's happening with that.Pierce2623 said:The only way I’d see this cooperation working is if the joint venture was actually for a new node.
https://www.trendforce.com/news/2024/10/22/news-intel-explores-foundry-alliance-with-samsung-in-high-level-talks/ -
emerth Also... AMD is supplanting Intel as the biggest CPU supplier in the datacenter. But Washington has only ever heard of Intel. This is the gov't picking winners, and as is usually the case, picking wrong.Reply