ANALYSIS/Joint venture with Intel unfavorable to TSMC: Expert

Taipei, Feb. 13 (CNA) The United States government's alleged plan to encourage Taiwan Semiconductor Manufacturing Co. (TSMC) to form a joint venture with Intel to boost American chipmaking will place the Taiwanese foundry giant in a more disadvantageous position than proposed tariffs on imported chips, a semiconductor expert said Thursday.

If TSMC forms a joint venture with its U.S. rival Intel, it faces the risk of technology outflow, said Liu Pei-chen (劉佩真), a researcher at the Taiwan Industry Economics Database of the Taiwan Institute of Economic Research (TIER).

Liu made the comments after a report by international financial services firm Baird said that Asia semiconductor supply chain talks suggest the U.S. government will ask TSMC to send engineers to Intel's 3nm/2nm fab, applying the company's know-how to ensure both the fab and subsequent manufacturing projects from Intel are viable.

Although TSMC has built production facilities in Dresden, Germany and Kumamoto, Japan through joint ventures, the local businesses it partners with are its customers, Liu indicated.

If a joint venture with Intel is formed, it will inevitably focus on advanced semiconductor technology and once technology leaks occur, that could jeopardize TSMC's leading edge in advanced technology, Liu added.

Particularly when U.S. President Donald Trump is committed to prioritizing American interests, if TSMC cooperates with Intel, it may be placed at a disadvantage, Liu noted.

TSMC's leadership in advanced technology is irreplaceable and gives it strong bargaining power, Liu said, adding that if the U.S. imposes tariffs on imported chips, the increased cost could be passed on to TSMC's American clients.

Thus, a joint venture with Intel is the worse choice for TSMC and more unfavorable than Trump's chip tariff plan, Liu explained.

Intel is currently facing difficulties in operation and encountering bottlenecks in technological development, while TSMC is in a leading position in technology. If a TSMC-Intel joint venture is formed, it will help Intel overcome difficulties and bolster the development of the U.S. semiconductor manufacturing industry, Liu said.

TSMC Chairman C.C. Wei (魏哲家) has said the company has no interest in acquiring Intel's chip manufacturing facilities after the U.S. firm spun off its foundry business, Liu added.

Baird analyst Tristan Gerra said that while there is no confirmation and potential completion of this project could take a long time, the move would make sense, "further building on Intel's prior CEO's focus on the company's core competency, manufacturing."