Did Taiwan Semiconductor Just Say "Checkmate" to Intel?

Adam Spatacco, The Motley Fool

Sun, Mar 9, 2025, 8:11 AM 4 min read

During President Biden's tenure successful the Oval Office, his medication made it a constituent to boost concern successful home manufacturing. One of the administration's accomplishments came successful 2022, erstwhile Biden signed the CHIPS and Science Act -- a instrumentality that seeks to put $280 cardinal into probe and improvement and semiconductor manufacturing present successful the U.S.

Over the past mates of years, Intel emerged arsenic 1 of the biggest beneficiaries of CHIPS Act funding. Given rising concern successful artificial quality (AI) infrastructure -- peculiarly successful information centers and chipware -- I antecedently predicted that Intel could beryllium a big-time victor nether the caller Trump medication -- which, similar his predecessor, is focused connected enhancing home manufacturing investments.

However, a caller announcement from Taiwan Semiconductor Manufacturing (NYSE: TSM) is making maine reconsider my cautious optimism astir Intel.

Let's research Intel's latest fumble and measure wherefore Taiwan Semi's latest announcement could beryllium the eventual checkmate determination against its American foundry rival.

Last year, Intel generated $53.1 cardinal successful full revenue. While this represented lone a 2% diminution twelvemonth implicit year, results from the company's foundry concern were much alarming.

In 2024, Intel Foundry generated $17.5 cardinal successful income -- down 7% twelvemonth implicit year. The foundry concern competes straight with Taiwan Semi, which owns astir 60% of the planetary foundry market. Given that Intel Foundry is decelerating astatine a faster complaint compared to the company's wide business, I'm not excessively assured Intel is proving that it tin drawback up to its long-established rivals.

To adhd brackish to the wound, Intel conscionable announced that it is present delaying opening a caller works successful Ohio until 2030. For reference, the works was expected to beryllium operational betwixt this twelvemonth and 2026. Now, it's pushed disconnected until adjacent decade.

On March 4, Taiwan Semi announced that it is investing $100 cardinal into the U.S. to physique 3 further fabrication plants, 2 packaging factories, and a probe and improvement (R&D) center. This concern comes connected the heels of an existing $65 cardinal task successful Arizona, wherever TSMC is gathering further manufacturing capabilities.

TSMC's concern successful the U.S. is meant to assistance the institution fortify operational relationships with large customers including Nvidia, AMD, Broadcom, and Qualcomm.

Over the past respective weeks, respective tech giants successful the Magnificent Seven radical person made nationalist their respective plans to put successful AI infrastructure implicit the adjacent respective years. On the surface, you mightiness deliberation that Intel could payment from rising superior expenditures (capex) from AI's biggest contributors. Instead, TSMC has taken enactment of Intel's struggles, and I spot the company's caller $100 cardinal concern successful the U.S. arsenic a determination that could further fortify its already-dominant pulse connected the foundry market.