AsianFin -- Intel Corporation may win a new customer for its foundry business as the Trump administration is ramping up efforts to boost manufacturing chips in the United States.
Credit：Intel
Intel is in talks with Advanced Micro Devices, Inc. (AMD) about potential making chips for the the fabless chip designer at Intel’s facilities, Semafor reported on Wednesday, citing sources famrliar with the matter. The two companies may not reach collaboration since the sources noted their discussions are at early stage.
It’s unclear how much of AMD’s chip production would move to Intel if a deal is stuck, according to the sources.There is also no clarity whether the deal would involve a direct investment from AMD, similar to the agreements that Intel inked with other companies.
Intel declined to comment on the report. An AMD representative responded that the company “does not comment on rumor or speculation.” Intel shares as of Wednesday close popped 7.1% on the news, and AMD stock rose 1.3%.
If AMD agrees on chip manufacturing in Intel’s foundry, it would be a big win for Intel, which is in a search for big foundry customers. Intel CEO Lip-Bu Tan has suggested the company could stop offering its 18A node if there isn’t enough demand for it. Such a partnership with AMD could validate for Intel former CEO Pat Gelsinger’s vision about producing chips for all the world’s tech tigans.
Analysts believe that a big customer would make Intel feel confident about investment in developing its manufacturing technology for its foundry business, and would send a signal to semiconductor peers that Intel can handle their business.
A deal with Intel should show AMD’s confidence in manufacturing with its biggest competitor as it competes with Intel in x86-based chips for personal computers (PCs) and servers. For AMD, the manufacturing partnership with Intel would have a greater symbolic significance than the shift of some chip-making, given the Trump administration is easing export control on chips to China and working to encourage chip-manufacturing in the U.S.
AMD, like its rival Nvidia Corp., currently mainly relies on Taiwan Semiconductor Manufacturing Co. (TSMC) to meet its manufacturing needs. Intel’s factories are considered inferior to TSMCs. But leading U.S. companies, following the Trump administration’s promotion for made-in-U.S., have diverted at least some of their production, most for less-advanced chips, towards Intel’s domestic foundries.
The latest reported consideration of new chip policies are the latest sign that the White House is seeking to drive companies to move to manufacturing in the U.S.
The Trump administration is mulling new tariffs on electronic devices based on the number of chips in each device, Reuters on Friday cited sources. The U.S. Commerce Department, under the reported plan, would impose a tariff on the imported product that is equal to a percentage of the estimated value of the chip content of the item.
The Wall Street Journal on Friday echoed the report, saying the Trump administration is considering a plan asking chip companies to produce the same number of semiconductors in the U.S. as their customers import from overseas products. It was said that companies can’t maintain such 1:1 ratio over time would face a new tariff. U.S. Commerce Secretary Howard Lutnick has reportedly discussed the plan with industry executives and told them it might be needed for national security.
The Commerce Department didn’t respond to requests for comment. Asked about the details of the plan, White House spokesperson Kush Desai on Friday said U.S. can not rely on foreign semiconductor imports that are “essential for our national and economic security.” "The Trump administration is implementing a nuanced, multi-faceted approach to reshoring critical manufacturing back to the United States with tariffs, tax cuts, deregulation, and energy abundance," Desai said.
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