While it may seem counter-intuitive to Taiwan Semiconductor Manufacturing Co.’s (TSMC) dominance as the world’s leading foundry, rumors swirl that the Taiwanese chipmaker is being pressured by the U.S. government to form a joint venture (JV) with American chipmaker Intel Corp.
According a report from the Wall Street Journal, the factory partnership could involve TSMC potentially sending engineers to one of Intel’s chip fabs to apply their expertise and “ensure its viability.” The factory then could be spun off from Intel and be run by TSMC under the foundry giant’s joint ownership platform.
Under the JV, it would then be used to ensure a stable chip production in the U.S.
Skepticism
While the model is feasible, it would not seem to benefit TSMC at all. Not only would it be ramping up a fab that would ultimately still be owned by the U.S. but it would also be sending its own talent away and investment for minimal returns.
Additionally, the U.S. government could use this fab as leverage in future negotiations with TSMC, particularly after President Trump said he would levy high tariffs on products from Taiwan.
For Intel, it would be a win as it would provide the financially struggling company with cash flow relief and allow the company to ramp its process technology. It could also help Intel to attract more fabless companies for its foundry business and taking customers away from TSMC.
Current JVs
TSMC has established similar joint ventures like the Japan Advanced Semiconductor Manufacturing Inc. (JASM) in Kumamoto, Prefecture, which features investments from Sony Semiconductor, Denso and Toyota Motors. The location would house two fabs in Japan and the huge investment is drawing more than 100 chip investments in the Kyushu, Japan, region since it was announced in 2021.
TSMC is similarly developing a fab in Dresden, Germany, part of its nearly $100 billion investments to expand its semiconductor manufacturing outside of its home base in Taiwan to Europe, the U.S. and Japan. Much like the JV in Japan, TSMC is seeking partnerships for investment and Bosch, Infineon and NXP are heavily involved in supporting semiconductors in automotive and industrial sectors where these chip fabs may play.
