trump's tariff push challenges tsmc and intel partnership
Hsinchu, Monday, 17 February 2025.
President Trump’s administration has ramped up pressure on TSMC to form a joint venture with Intel. This move aims to bolster U.S. semiconductor manufacturing amidst ongoing tariff discussions. Analysts view this strategy as potentially disruptive to TSMC’s current operations. It could mean transferring process technology, which experts argue could undermine TSMC’s competitive edge. This push is seen by some as unfairly forcing TSMC to compromise its advantages. The proposed tariffs and joint ventures are part of a broader U.S. initiative to reclaim leadership in advanced chip manufacturing. However, implementing these tariffs is practically challenging. TSMC’s chips are primarily processed and assembled outside the U.S. The focus remains on negotiating terms that would make any collaboration with Intel beneficial for TSMC. The delicate balance involves safeguarding TSMC’s proprietary technology while meeting new U.S. demands for domestic production.
Market impact and tariff implications
Trump’s threat to impose tariffs on Taiwanese semiconductors has caused market uncertainty, though experts suggest limited direct impact on TSMC. According to analysts, TSMC’s annual chip exports to the US amount to less than one month of its revenue [1]. The company can largely pass increased costs to customers [2]. However, Trump’s administration holds multiple leverage points to bring TSMC to negotiations [2][3].
Intel partnership scenarios
Market speculation centers on potential collaboration between TSMC and Intel, ranging from joint ventures to factory acquisitions. TSMC is reportedly considering taking control of Intel’s manufacturing facilities [3]. However, industry analyst Stacy Rasgon warns this arrangement could be detrimental unless extremely favorable terms are offered, as it risks transferring valuable intellectual property to a competitor [1][2].
Strategic manufacturing considerations
TSMC maintains strict control over its manufacturing know-how and research activities in Taiwan [2]. The company’s Arizona facilities focus primarily on production line operations and maintenance [2]. Analysts suggest TSMC is likely to resist any technology transfer demands that could compromise shareholder interests [1][3]. White House officials have indicated resistance to foreign entities operating Intel’s US chip facilities [4].