Reed’s view
The US government’s plan to convert more than $10 billion in grants for a 10% stake in Intel is only a partial, temporary fix to the country’s reliance on Taiwan for advanced semiconductor manufacturing.
Without the equity stake, Intel may never have seen the much needed cash. But the bigger benefit is the signal that Washington wants to save the chipmaker.
A lifeline for Intel could be viewed as the chip equivalent of the strategic oil reserve — a way to protect against geopolitical forces that could cripple the US economy. But it’s time to accept that Intel is probably not going to fully bounce back and challenge TSMC.
What the US really needs is a new champion of chip manufacturing that doesn’t just challenge incumbents, but leapfrogs them.
For all the Trump administration’s hyperbole about making America great again, there’s been surprisingly little talk of winning the semiconductor race with a knockout punch. Instead, it’s been mostly about life support.
Even a fraction of the $4.5 trillion tax cuts estimated over this decade could jump-start the US’s efforts to become the world’s most advanced semiconductor manufacturer once again. The slash-and-burn approach to funding academic research counters that goal.
Keeping Intel alive makes a lot of sense in the short term. But if the US doesn’t produce the next TSMC, the country will pay a big price in the long run.
Notable
- The world’s largest chipmaker, TSMC, reported its first profit from its Arizona subsidiary, launched four years ago. The US unit brought in more than $150 million in net profit during the first half of 2025, compared to a loss of $4.3 billion a year earlier.
- In addition to Intel, Reuters reports that US Commerce Secretary Howard Lutnick is looking into the federal government taking an equity stake in other chip manufacturers that receive CHIPS Act funding to build factories in the nation. This could include TSMC, Samsung, and the largest grant recipient to date, Micron.