U.S. Government Urges Nvidia and Apple to Utilize Intel’s Foundries: A Push for Domestic Chip Production

In a significant move to bolster the U.S. semiconductor industry, the U.S. Department of Commerce Secretary Gina Raimondo has made a compelling appeal to tech giants Nvidia and Apple to shift their chip production to Intel’s foundries. This strategic push aims to reduce America’s reliance on foreign chip manufacturers, particularly Taiwan Semiconductor Manufacturing Company (TSMC), amidst growing geopolitical tensions.

The Geopolitical Context

The backdrop of this appeal is the escalating geopolitical risk surrounding Taiwan. With China eyeing potential control over Taiwan, the U.S. government is keen on mitigating the risks associated with relying heavily on TSMC for advanced chip production. The Biden administration’s focus is on ensuring a stable and secure supply chain for critical technologies, which is vital for national security and economic stability.

Intel’s Position and Challenges

Intel, a key player in the U.S. semiconductor landscape, has been striving to compete with industry leaders like TSMC and Samsung. However, Intel Foundry Services (IFS) has faced significant challenges, including a $1.6 billion loss and a substantial drop in stock price. Despite these hurdles, Intel remains a crucial component of the U.S. government’s strategy to revitalize domestic chip production.

The CHIPS Act and Federal Support

The CHIPS Act, a landmark legislation aimed at boosting the U.S. semiconductor industry, has allocated substantial funds to support domestic chip manufacturing. Intel is one of the major beneficiaries of this act, although the disbursement of funds has been delayed until the company can demonstrate improved performance. The federal government’s investment in the semiconductor sector is the highest it has been in nearly three decades, underscoring the importance of this initiative.

Nvidia and Apple’s Potential Shift

During private meetings with investors, Secretary Raimondo emphasized the need for Nvidia and Apple to consider U.S.-based foundries for their chip production. Nvidia CEO Jensen Huang has indicated that while shifting production from TSMC to another foundry might impact performance and cost, it is a feasible option if necessary. This flexibility is crucial as the U.S. seeks to strengthen its domestic semiconductor capabilities.

Conclusion

The U.S. government’s push for Nvidia and Apple to utilize Intel’s foundries is a strategic move to enhance national security and economic resilience. By reducing dependence on foreign chip manufacturers, the U.S. aims to secure its technological future in an increasingly uncertain geopolitical landscape. As Intel works to overcome its challenges, the support from major tech companies and federal initiatives like the CHIPS Act will be pivotal in shaping the future of the U.S. semiconductor industry.