Intel, a fallen Silicon Valley icon trying to restore its reputation as the most prominent enterprise of America’s semiconductors, is working with the Trump administration in a plan to turn its plants for creating chips into a rival Giant Taiwanese.
Over the past few months, Frank Yeary, the Interim Executive Chairman of Intel, has spoken with administration officials and executives of Taiwan’s semiconductor production company for an agreement that would separate Intel’s Intel production business from its semiconductor design and the business business, according to four people with knowledge of the plan, who spoke about the state of anonymity.
TSMC, which produces about 90 percent of the world’s most advanced semiconductors, would take control of Intel production business and will receive a majority of business shares along with a consortium of investors that may include private capital firms And other technology companies, the four people said.
The Trump administration has encouraged TSMC to make the deal. Howard Lutnick, President Trump’s nominee for the Secretary of Commerce, has been involved in conversations and considers them one of the following challenges of his new work, two of the people known to the discussions said.
It is not clear how much the Intel production business would take over or how much money the Taiwanese company would invest. The deal can be limited to Intel’s indoor plants, to states including Oregon, Arizona and New Mexico, or also include facilities in countries like Ireland and Israel, people said.
Intel’s business prospects were poured as they failed to develop smartphones and artificial intelligence chips. Despite the government’s best efforts to revive the company by promising billions of dollars of subsidies through the biden administration chips act, Intel has continued to fight.
Intel and TSMC refused to comment. Mr. Lutnick did not respond to a comment request.
At the end of last year, the Intel Board approached TSMC to appreciate its interest in some kind of partnership, two of the people familiar with the talks said. In January, the chief executive of TSMC, CC Wei, met separately with Mr. Lutnick and Mr. Yeary to discuss how a connection can work.
Mr. Yeary has spoken regularly with Mr. Lutnick about the idea since then, three of these people said. Intel’s interest in the lifting of the company has also opened the door to the researchers interested in buying the business of Intel products, including Qualcomm. A Qualcomm spokeswoman refused to comment.
Some details of the discussions were previously reported by Digimes, a Taiwanese newspaper and Bloomberg.
Now the question is whether the Trump administration thinks that a sick national champion like Intel is better in the hands of a foreign company or whether the administration should require another solution.
“Even with the possible support of the US government from the chip act and officials thirsty to see the firm withdraw and lead the Renaissance of advanced production in the US, the road will be difficult,” said Paul Trolo, one Partner at Albright Stonebridge Group which traces the industry.
It depends on the negotiations are questions about Mr. Trump’s approach to the chips and Taiwan industry, which is very different from the strategy of former President Joseph R. Biden Jr. Mr. Trump has criticized Biden administration investments in the production of internal chips, threatened to impose tariffs on foreign chips, Taiwan himself accused against Beijing’s violation.
In remarks to Republican lawmakers at the end of January, Mr. Trump said a considerable fee, non -subsidies, was everything to force chip companies back to the United States.
“We want them to come back, and we don’t want to give them billions of dollars like this ridiculous program that has Biden,” the president said.
At his January 29 Senate confirmation session, Mr. Lutnick seemed to be walking a careful line in the chips program. He described it as “indispensable and important” and a “payment” for the return of production in the United States. But Mr. Lutnick refused to fully engage in honor of the contracts the companies had already signed with the government.
To calm Mr. Trump, Taiwanese officials and businessmen have cultivated links with people in his orbit, navigating new deals in the gas sector and trying to explain how the production of Taiwanese semiconductors benefits the United States.
Taiwanese officials are also monitoring talks on the future of Intel. For Taiwan, the predominance of the TSMC of the advanced chip production has become what some commentators call a “silicone shield” that impedes military actions from China and encourages support from the United States.
Taiwan’s president, Lai Ching, said on Friday that his government would work with the island’s semiconductor companies to develop a strategy that addresses Mr. Trump’s complaints while defending Taiwan’s role in the chip sector.
“The Taiwan government will be in mutual contact and discussions with the semiconductor sector to formulate the right strategy, and then there will be further discussion of proposals with the United States,” Mr. Lai at a press conference.
TSMC can address Mr. Trump’s demands by simply building more production capacities in the United States, said Stacy Rasgon, a semiconductor analyst at Bernstein Research. TSMC, which received up to $ 6.6 billion grants from the act of chips, is building three factories in Arizona and has the ability to expand there.
The idea of breaking Intel speaks of how much the company’s assets have changed. Founded in 1968, it became the most valuable semiconductor company in the world by designing and producing chips for personal computers and data centers. But the company has fought in recent years to innovate and ceded ground for rivals like Nvidia, the prevailing manufacturer of chips.
Pat Gelsinger, who was appointed chief executive of the Intel in 2021, promised to return the company by regenerating its manufacturing business, but the attempt crashed. In November, the Intel Board forced Mr. Gelsinger to resign.
Intel manufacturing business, which he calls Intel Foundry, reported an operational loss of $ 13.4 billion in 2024 as customers’ sales were reduced 60 percent. Last year, the company said it was planning to make business an independent branch.
At the price of Intel’s stock below nearly 50 percent last year, the intel allocation can make it vulnerable to a taking over, said Patrick Moorhead, the founder of Moor Insights and Strategy, a technology research firm.
“Intel as we know that it would cease to exist,” he said. “It would be the absolute end of an era.”
Chris Buckley Reporting contributed by Taipei, Taiwan.