The Biden administration is acutely aware of the strategic vulnerabilities posed by the United States’ reliance on Taiwan for semiconductor manufacturing.
With over 90% of the most advanced semiconductors fabricated by Taiwan Semiconductor Manufacturing Company (TSMC), the geopolitical implications are significant, particularly given the looming threat of Chinese aggression towards Taiwan.
In an unprecedented scenario where China might gain control over TSMC, the U.S. could become ‘hostage’ to China regarding essential technology underpinning modern society.
Efforts initiated during the Trump administration, involving partnerships with TSMC and other leading chip manufacturers, are gradually increasing semiconductor production capacity within the United States.
However, analysts caution that even with these advancements, the U.S. is projected to hold only a 20% share of global semiconductor fabrication capacity in the next five years.
Given this context of national security concerns, there is an ongoing debate about whether investing in Intel is the optimal approach to bolster U.S. chip production capabilities.
Intel operates primarily through two segments: a mature yet profitable products business and a struggling foundry division.
The foundry business, which provides chip fabrication services, reported staggering losses of $18 billion in 2024 and an additional $3 billion in just the first half of 2025.
As a response, Intel has initiated significant workforce reductions, slashing 15,000 jobs last year and signaling intentions to lower its workforce even further.
Driven by these factors, Intel is re-evaluating its operational strategy.
The recent announcement of a $2 billion equity investment from Softbank is not seen as a panacea for the company’s ongoing setbacks.
New CEO Lip-Bu Tan has temporarily halted plans to build five advanced semiconductor fabrication facilities, citing the challenging financial strain on Intel’s balance sheet.
In a candid assessment, Tan indicated that Intel may scale back its ambitions, particularly concerning its 18A, 1.8 nanometer fabrication technology, opting instead to focus on the more promising but still inferior 14A, 1.4 nanometer technology.
The 14A process is considered the leading edge for processor fabrication, delivering a potential 15% to 20% performance improvement, along with a significant reduction in power consumption.
Yet, industry leaders like Nvidia and AMD have yet to commit their business to Intel’s promising offerings, choosing instead to establish ties with TSMC for their advanced semiconductor needs.
Tan has emphasized that Intel will only advance with the 14A technology if it secures significant orders from these key players in the chip design space.
The question remains whether the Biden administration is poised to deepen its investments in Intel, a company wrestling with considerable challenges in the semiconductor market.
An alternative strategy could involve incentivizing TSMC to enhance its investments in U.S.-based semiconductor manufacturing, thereby helping to cultivate a domestic champion in this vital sector.
While President Trump has expressed a desire to establish a U.S.-based semiconductor powerhouse, pouring funds into Intel’s declining business may not be the most strategic decision.
Another viable option would be for the Department of Defense to adopt Intel’s 14A technology for governmental and defense applications, which could stimulate domestic production without exacerbating the company’s financial woes.
Ultimately, the focus should remain on national security and technological independence, steering clear of decisions driven by national pride or personal agendas.
image source from：washingtonexaminer
