Washington, D.C. – The Trump administration is reportedly hesitant to allow Taiwan Semiconductor Manufacturing Company (TSMC) to take over the operation of Intel’s semiconductor manufacturing facilities in the United States. According to a senior White House official speaking to Reuters, while the government supports foreign investment in American industry and technological innovation, it remains firm that U.S. semiconductor plants should remain under American control.
"President Donald Trump's administration may not support Intel's U.S. chip factories being operated by a foreign entity," the official stated.
The comment follows reports of discussions between Intel and TSMC regarding a potential deal that would see TSMC managing Intel's advanced chip fabrication plants equipped with extreme ultraviolet (EUV) lithography tools. The idea reportedly emerged after U.S. government officials allegedly suggested the possibility to TSMC, which responded positively.
While the potential agreement initially seemed feasible, industry experts argue that the transition would be technically challenging. Intel and TSMC employ vastly different semiconductor manufacturing processes, making a direct takeover highly complex. Implementing TSMC’s proprietary technology in Intel’s facilities would require sharing sensitive trade secrets—an issue that raises significant competitive and national security concerns.
Moreover, Intel has historically maintained direct control over its chip design and production. Handing over operations to TSMC would mark a fundamental shift in the company’s business model. This could push Intel toward becoming a design-only firm, moving away from its integrated device manufacturing (IDM) model and potentially reducing its gross margins, which have historically exceeded 50%.
Beyond the technical and operational hurdles, the potential deal carries broader geopolitical and economic implications. The U.S. government has been actively working to bolster domestic semiconductor production to reduce reliance on foreign manufacturers. Allowing a foreign company—albeit a trusted partner like TSMC—to operate a key part of the American semiconductor supply chain could be seen as counterproductive to these efforts.
However, a possible workaround could involve joint investments by multiple American companies alongside TSMC. This arrangement would ensure that production capacity benefits U.S. firms while maintaining domestic oversight of critical semiconductor manufacturing. Bloomberg previously reported that such a model was under discussion, though no concrete agreements have been announced.
Intel has heavily invested in expanding its U.S.-based fabrication capabilities, but its efforts to establish a competitive contract manufacturing business have so far yielded limited success. While the company has secured a handful of clients, it has yet to rival foundry giants like TSMC and Samsung in attracting major external customers.
Should the deal with TSMC move forward, Intel would face strategic realignment, potentially losing control over its manufacturing technologies. Meanwhile, TSMC, which maintains a gross margin of around 55%, would need to evaluate the financial viability of such an arrangement while safeguarding its own intellectual property.
For now, the future of Intel’s chip fabs remains uncertain. With the Trump administration unlikely to endorse foreign control over these strategic assets, Intel may need to explore alternative solutions to optimize its manufacturing operations while maintaining American oversight.
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