tsmc eyes $35 billion intel us plant deal: a strategic shift?
Taipei, Monday, 24 March 2025.
a potential $35 billion investment by tsmc in intel’s us facilities is making waves. this deal might involve tsmc acquiring two intel wafer fabrication plants. fueled by us government encouragement, the move could reshape the semiconductor industry. the investment could alter tsmc’s expansion plans and competitive strategies. this deal could be a major win for us chip manufacturing. trump previously hinted at this investment. the deal could see intel’s backend wos packaging handled by amkor.
tsmc stock reaction
News of the potential investment caused tsmc’s stock to jump. The stock opened higher at 986 taiwan dollars [1]. However, the stock faced selling pressure, retreating to around 983 taiwan dollars [1]. Tsmc’s stock has recently tested the 1,000 taiwan dollar mark but failed to maintain those levels [1]. One company, Zhonghuan, had already sold 320 shares of tsmc at 984 taiwan dollars, taking a loss of 11.73 million taiwan dollars [1].
manufacturing capacity and expansion
Tsmc is already significantly expanding its us presence. The company is investing $100 billion to enhance its advanced semiconductor manufacturing in the united states [1]. This includes plans for three new wafer fabs, two advanced packaging facilities, and a research and development center [1]. Tsmc’s total investment in the us is approximately $165 billion [1]. If the intel deal goes through, the total investment could reach $200 billion [1].
geopolitical considerations and us strategy
The us government is actively encouraging chip manufacturing within its borders [1]. This initiative aims to bolster supply chain resilience [6]. Nvidia’s ceo, huang, affirmed plans to increase procurement of us-made chips and electronics [6]. Nvidia anticipates spending $500 billion over the next four years on electronics, with a significant portion dedicated to us manufacturing [6]. Amkor Technology is also building a new facility in Peoria, Arizona, near tsmc, to create a collaborative ecosystem [7].
intel’s challenges and market position
Intel has faced significant challenges in recent years [2]. The company’s stock has dropped more than 50% since early 2024 [2]. Intel reported a net loss of $18.8 billion in 2024 [2]. Several analysts have lowered intel’s stock target price [2]. Intel’s struggles in the ai chip market have further impacted its competitiveness [2]. Despite these challenges, intel is pushing forward with its idm 2.0 plan, aiming to regain its position in chip manufacturing [2].
potential impact on taiwan’s semiconductor industry
Tsmc’s increased investment in the us could reduce investments in taiwan’s advanced manufacturing [1]. Local taiwanese packaging and testing companies might lose orders to us-based firms such as amkor [1]. Amkor’s new arizona facility will specialize in advanced packaging and testing technologies [7]. This could shift some of the backend processing away from taiwanese companies [1]. The move raises concerns about taiwan’s dominance in semiconductor manufacturing [5].
analyst perspectives on intel
Analysts have mixed views on intel’s future [3]. Some analysts maintain a neutral rating, with target prices between $45 and $50 [3]. Other analysts have downgraded intel’s rating, expressing concerns about execution risks [3]. Bernstein analysts suggest the market may be overvaluing intel’s ifs potential [3]. Intel’s transition involves risks such as delays in process node advancements and geopolitical uncertainties [3]. Securing commitments from key clients remains crucial for intel’s success [3].