To run Intel's chip manufacturing facilities, Taiwan Semiconductor Manufacturing Co. (TSMC) and Intel have signed a preliminary agreement to establish a joint venture.
According to reports, the Trump administration started the negotiations between the two massive semiconductor companies in an attempt to boost Intel, which has recently suffered from manufacturing problems.
Twenty percent of the new business was supposed to be owned by TSMC.
US President Donald Trump has been advocating for the return of advanced manufacturing to the United States after accusing Taiwan of "stealing" the US chip sector.
The strategy aligns with TSMC's recent declaration that it will construct state-of-the-art manufacturing facilities in the US at a minimum cost of $100 billion.
Despite the initial agreement, some Intel officials are opposed to the proposed joint venture as they fear it will hinder the advancement of Intel's own chipmaking technologies and result in mass layoffs.
Given that the two businesses employ distinct models of production equipment and materials, there is observed to be persisting concerns regarding how they will combine their operations.
For a long time, TSMC has been under pressure to shift more of its manufacturing outside of Taiwan due to concerns that any dispute with Beijing may interrupt supplies of the vital technology.
The business promised to invest over $65 billion in three plants in Arizona during the administration of former President Joe Biden; one of these factories started production in late 2024.
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Although Trump's slew of trade duties announced by the White House on Wednesday have so far spared semiconductors, the US president regularly puts pressure on TSMC and other chip makers for their lack of US production.