President Donald Trump has indicated his intention to strengthen Intel’s position to better compete against Taiwan Semiconductor Manufacturing Company (TSMC) for U.S. chipmaking business. This move comes amid growing concerns about semiconductor supply chains and national security implications of foreign chip manufacturing dominance.
The President’s signal of support for Intel represents a potential shift in how the U.S. government might approach domestic semiconductor manufacturing, an industry that has seen significant offshoring over recent decades. Intel, once the undisputed leader in chip manufacturing, has fallen behind TSMC in recent years in terms of technological advancement and market share.
Strategic Importance of Semiconductor Manufacturing
Semiconductors form the backbone of modern technology, powering everything from smartphones to military equipment. The U.S. has grown increasingly concerned about its dependence on foreign-made chips, particularly those manufactured in Asia.
TSMC, based in Taiwan, has emerged as the world’s leading contract chipmaker, producing advanced processors for companies including Apple, AMD, and Qualcomm. The company’s technological edge has put pressure on Intel, which has struggled with production delays and technological setbacks in recent years.
Trump’s interest in bolstering Intel aligns with broader efforts to secure supply chains for critical technologies and reduce dependence on foreign manufacturers. The semiconductor industry is viewed as essential to national security and economic competitiveness.
Potential Government Support
While specific details of how the administration might support Intel remain unclear, several approaches could be under consideration:
- Direct financial incentives or subsidies for domestic manufacturing expansion
- Tax breaks for capital investments in new fabrication facilities
- Government contracts prioritizing domestically-produced chips
- Research and development funding for advanced semiconductor technologies
The semiconductor industry requires massive capital investment, with modern chip fabrication plants (known as fabs) costing upwards of $10 billion. Government support could help offset these costs and make domestic manufacturing more competitive with overseas operations that often benefit from their own government subsidies.
Industry and Economic Implications
Any move to strengthen Intel’s position would have significant implications for the global semiconductor industry. TSMC has already announced plans to build a $12 billion manufacturing facility in Arizona, partly in response to U.S. concerns about supply chain security.
Intel CEO Bob Swan has previously called for increased government support for U.S. semiconductor manufacturing. The company has manufacturing facilities in Oregon, Arizona, New Mexico, and Massachusetts, making it the largest U.S.-based chipmaker.
Analysts note that rebuilding American leadership in semiconductor manufacturing would require sustained investment and policy support. The industry directly employs about 250,000 Americans and supports over a million additional jobs throughout the supply chain.
Trump’s signal comes as lawmakers from both parties have expressed support for measures to strengthen domestic semiconductor manufacturing. The CHIPS for America Act, introduced with bipartisan support, aims to provide tax incentives and research funding for the U.S. semiconductor industry.
As global technology competition intensifies, particularly between the U.S. and China, control of semiconductor manufacturing has become a key strategic concern. The President’s interest in supporting Intel reflects this growing recognition of chips as critical infrastructure for economic and national security.
