Wesley Hilliard
Apple could benefit from more chip fab availability in the United States in the coming years thanks to a joint venture that will bring TSMC talent to Intel foundries.
The preliminary agreement between the competitors will give TSMC a 20% stake in the combined company, while Intel and other semiconductor companies will own the majority of shares. TSMC will bring talent and manufacturing methods to teach American employees and get the US-based Intel foundries running.
According to the the report from The Information, discussions are still underway between Intel and TSMC. Ideally it will mean making more TSMC chips in the United States.
However, regardless of the deal, the process will take some time. Intel's foundries are filled with equipment that is useless for TSMC's processes, so that will have to be sold or scrapped. Getting the right equipment, employees trained, and everything running efficiently could be a years-long process.
Apple will likely benefit from the joint venture, eventually, as it is a customer of TSMC's. The company designs the chips and provides those designs to TSMC, who manufactures them.
The news arrives weeks after Apple committed $500 billion to US manufacturing and TSMC committed $100 billion. Part of that is going to creating foundries in Arizona.
As President Trump's tariffs rock the markets and create the potential for increased prices across the board, it may be of some relief to hear about these commitments. However, it will take time before TSMC gets the new US-based factories going.
The TSMC foundry already operational in Arizona started making A16 processors in September, 2024. It is expected to hit production quotas in the first half of 2025, but it is still just a small portion of Apple's chip needs.
For the foreseeable future, as long as the existing tariffs are in place, Apple's products will be heavily affected. And no matter how much manufacturing and assembly moves to the United States, there will always be some need to import goods for products.
-m.jpg)
Malcolm Owen
Marko Zivkovic
Chip Loder
Christine McKee
William Gallagher
Amber Neely
-m.jpg)
13 Comments
Are they mainly producing A16 processors or the N4P chips in general?
We have to start somewhere rather than borrowing and borrowing and borrowing, eventually nobody will give us credits anymore…we are in debt up our a-____
This deal just sounds bonkers. Bonkers as in how can it possibly work?
Intel's problems were like Apple's problems in the 1990s before they bought NeXT. Very very poor marketing, sales and engineering decisions were being made, year after year after year. Those are made at the VP and senior VP levels. Apple was able to get out of their funk by having NeXT employees take over those positions. The single most important one was having Avie Tevanian taking over software engineering. This enabled Apple to ship viable product, including Mac OS 8. It wasn't called a reverse takeover for nothing, where you can say NeXT bought Apple for -430m USD. Forstall was incredibly successful user interface design, OS design, and shipping. Rubenstein took over hardware. Tim Cook came in to fix operations, and most important one of Steve Jobs being CEO.
Intel can't be fixed without changing all the critical management and leadership positions. That usually requires a reorganization from a takeover. Intel's number one problem is that the management of their fab technology has been broken for about 12 years now. The decisions that made 10nm a clusterfuck likely happened around 2012 to 2013 or so, and bad decisions after that only compounded it. I bet someone can write a very good sunk-cost fallacy book on it, with gigantic heapings of hubris. This was about a 7, 8 year process. That's what it takes for a gigantic dominant company like Intel to fall. Bad decisions every year for multiple years.
So, who's in charge with this deal? Are they fixing Intel fabs or are they replacing them with TSMC fabs? Which way is the money flowing?
So long as this doesn’t involve Intel getting IP from tsmc, sounds like a good move.
TSMC + Intel stand to control 100% of desktop chips and 70% of everything else. It is the end to all competition.
Handing over keys to US manufacturing while turning off US R&D is unexpected. Doing so to a company from an area that US sees as part of China is even more so.
We need for Intel to be American and deliver future innovation from outside China.