It would be an unprecedented shift in Intel’s strategy. The Santa Clara company is considering for the first time in its history to have its chips manufactured in third-party factories, undermining its strategy of the last 30 years. Intel is indeed the last American company to design and then manufacture its processors entirely on American soil, in factories located in Oregon, Arizona or even in New Mexico. Even if of course, Intel also has factories in other countries, including Israel, Ireland or even China.
But faced with the difficulties encountered by its production lines – they struggle to keep up with 7-nanometer engraving – Intel thinks it would be more reasonable to call on subcontractors who are more efficient than it in this area. Of course, TSMC would be the first to be affected. The Taiwanese company is at the forefront of the field, manufacturing chips for many foreign companies, including Apple’s.
Manufacturing that would be closer to China
This strategic change would be an admission of failure for Intel, which in recent years has missed the turn in mobility and de facto in the design of ARM chips that equip smartphones, tablets and even soon the next Apple Macs. It would also be a disavowal of the industrial policy of Donald Trump, who since the start of his mandate has tried to encourage American technology companies to manufacture their equipment in their territory of origin.
If TSMC took over the manufacturing of Intel’s chips, the know-how and engineering of the American group would then be transferred closer to China, certainly in the factory in Hshinchu, based in Taiwan. While the Taiwanese state claims its independence from China, the latter continues to regard the island as a province in its own right.
A strategic activity for the United States
This situation would raise doubts about China’s spying on American equipment and communications. Intel chips are present not only in personal computers, but mainly power data centers used in the nuclear, space and aeronautical industries of the United States and its allies.
It was this argument in particular that prompted the US president to oust Huawei from 5G networks in the United States and to ban several companies, including Google, from collaborating with the Chinese manufacturer. Following the announcement, Intel shares fell 16% in the stock market.