UPDATED 20:29 EST / MAY 10 2020

INFRA

Trump administration urges Intel, TMSC to expand U.S. chip production

President Donald Trump’s administration is trying to convince major silicon chipmakers including Intel Corp. and Taiwan Semiconductor Manufacturing Company, Ltd. to set up new manufacturing operations in the United States to help reduce its reliance on Asia for some of its most critical technology.

That’s according to the Wall Street Journal, which reported Sunday that officials are holding talks with both Intel and TMSC about building new chip foundries in the U.S.

Intel already has some manufacturing facilities in the U.S., but the talks center around a major expansion of those operations. TSMC meanwhile, would build its first U.S. factory, if the talks come to fruition.

Intel is said to be “very serious about this,” according to comments attributed to Greg Slater, who is the company’s vice president of policy and technical affairs. The plan is to create a new plant for advanced chips that can be made securely for the U.S. government, its military and other customers.

“We think it’s a good opportunity,” Slater reportedly said. “The timing is better and the demand for this is greater than it has been in the past, even from the commercial side.”

As for TSMC, the Journal reported that it has been holding talks with officials from both the Commerce and Defense departments, as well as Apple Inc., about building a factory in the U.S. That facility would also build products for the U.S. government and military, and also serve as a new supplier for Apple, the Journal said.

“We are actively evaluating all the suitable locations, including in the U.S., but there is no concrete plan yet,” TMSC said in a statement.

The Journal said the U.S. government has been pressuring TSMC to build a U.S. factory for some time, since it wants sensitive components used in fighter jets, satellites and other military hardware to be built in-house. An American manufacturing operation could be useful for TSMC as it counts several major U.S. companies among its clients, including Intel, Broadcom Ltd., Nvidia Corp. and Advanced Micro Devices Inc. Those clients would potentially be able to design and build more advanced chips for the U.S. military if TSMC were to manufacture them in-country, the Journal said.

A U.S.-based TSMC facility would also enable Apple to shift some of its production to the U.S., while helping Trump to achieve his goal of bringing more manufacturing back to the country.

Analyst Patrick Moorhead of Moor Insights & Strategy told SiliconANGLE that the talks were likely linked to the ongoing trade war between the U.S. and China.

“Ever since crumbling relations with China started early in Trump’s term, there has been a desire for more fab processors for critical infrastructure in the U.S.,” Moorhead said. “And even though Taiwan and South Korea are U.S. allies, there are fears that those fabs could be attacked. The shame here is that the administration allowed a very capable leading edge fab, GlobalFoundries, to change its strategy to a low-power design fab.”

The Journal said there is also talk about another major chipmaker, Samsung Electronics Co. Ltd., expanding its current U.S. contract-manufacturing operations to create more advanced chips, again for potential government use.

Photo: David/Flickr

A message from John Furrier, co-founder of SiliconANGLE:

Your vote of support is important to us and it helps us keep the content FREE.

One click below supports our mission to provide free, deep, and relevant content.  

Join our community on YouTube

Join the community that includes more than 15,000 #CubeAlumni experts, including Amazon.com CEO Andy Jassy, Dell Technologies founder and CEO Michael Dell, Intel CEO Pat Gelsinger, and many more luminaries and experts.

“TheCUBE is an important partner to the industry. You guys really are a part of our events and we really appreciate you coming and I know people appreciate the content you create as well” – Andy Jassy

THANK YOU