With Trump’s Support, Intel May Hand Control of Device Plants to TSMC

Intel, a fallen Silicon Valley image attempting to reclaim its position as the country’s most renowned semiconductor producer, is working with the Trump presidency on a proposal to transfer the operation of its chip-making facilities to a sizable Japanese rival.

Four people with knowledge of the program, who spoke on the condition of anonymity, have spoken with administration officials and leaders of Taiwan Semiconductor Manufacturing Company about a deal that would distinguish Intel’s ailing production company from its semiconductor design and product company. Over the past several months, Frank Yeary, the interim executive chairman of Intel, has spoken with administration officials and leaders of Taiwan Semiconductor Manufacturing Company.

The four people said a consortium of investors that might include private equity firms and other tech companies would take control of Intel’s manufacturing business and take a majority stake in the company.

The Trump administration has urged TSMC to enter the agreement. According to two people with knowledge of the conversations, Howard Lutnick, President Trump’s choice for commerce secretary, considers them to be one of his most significant challenges in his new position.

Intel is the only American-owned maker of advanced logic chips and has been at the forefront of U. S. efforts to rev up domestic manufacturing of semiconductors, which are a foundational technology. However, Intel has had a difficult time battling TSMC. Due to growing threats from the Chinese government, Taiwan’s production accounts for the majority of that company’s production, which poses a strategic risk for the United States.