By Adam Clark

Taiwan Semiconductor Manufacturing is basking in the approval of the Trump administration for its U.S. investment plans. Intel faces an uphill struggle to compete but has detailed its plan to regain leadership in chip manufacturing, involving a costly bet on new machinery.

Taiwan Semiconductor, or TSMC, has claimed the role of the world's leading manufacturer of advanced chips. Now it is planning to spend a total of $165 billion on U.S. factories as it looks to simultaneously defuse the threat of U.S. tariffs on imported semiconductors and Chinese efforts to claim the self-ruled island of Taiwan.

The American investment plan has won it the backing of the White House, underlined on Tuesday when Secretary of Commerce Howard Lutnick visited TSMC's site in Arizona where the company was breaking ground on a third chip-fabrication facility.

"We are at TSMC Arizona to celebrate the return of American manufacturing. President Trump's bold leadership and clear direction are driving companies and jobs back to this country at a record pace," Lutnick said in a statement.

The public endorsement could allay fears TSMC will face levies on its Taiwan-made chips. President Donald Trump has publicly stated he told the company it could face a tax of up to 100% if it doesn't shift more production to the U.S.

American depositary receipts of TSMC were rising 1.5% in premarket trading on Wednesday, with the ADRs down 17% so far this year through Tuesday's close.

What's good news for TSMC is likely bad news for Intel, which would face an easier path to winning significant chip-manufacturing business if its Taiwanese rival's products faced tariffs.

However, Intel is hoping to prove it has superior technology with the 18A process it is launching this year and the next-generation 14A process where low-volume production is planned for 2027. It said Tuesday that multiple customers have said they would build test chips on the new process and noted that research, development, and wafer production will all be U.S.-based.

"Intel is committed to building a world-class foundry that serves the growing need for leading-edge process technology, advanced packaging and manufacturing," said CEO Lip-Bu Tan in a statement.

One notable difference between Intel and TSMC's plans is that the American company has acquired two of the most advanced lithography tools for manufacturing semiconductors on the market from Dutch company ASML Holding. The high numerical aperture extreme ultraviolet, or High NA EUV, machines cost more than 350 million euros each, equivalent to about $398 million.

TSMC has publicly been reluctant to order ASML's High NA EUV systems, citing its high cost, and suggested it could continue to use older machines for advanced chip manufacturing.

That means there could be a window for Intel to secure a technological lead. However, the company still needs to prove it can attract external customers, with Nvidia and Broadcom reported to be running tests on its 18A process.

Write to Adam Clark at adam.clark@barrons.com

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April 30, 2025 08:15 ET (12:15 GMT)

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