The U.S. government is eager to establish domestic foundry capabilities to produce AI chips, and Intel is working hard to position itself as the provider. Intel CEO Pat Gelsinger has turned to US Commerce Department Secretary Gina Raimondo for help in convincing fellow U.S. companies, including Nvidia and Apple, to support chip manufacturing in the U.S.
Raimondo has met with several public market investors to persuade companies that it’s in their best interest to support chip manufacturing in the U.S. given the increasing geopolitical risks around Taiwan. She emphasized the economic benefits of having a domestic foundry capable of producing AI chips.
Convincing these companies to switch contract manufacturers will be a significant challenge. Nvidia, for example, relies heavily on TSMC’s advanced manufacturing capabilities for its latest high-performance GPU AI accelerators. TSMC is also a crucial manufacturing partner for most other big tech companies.
Raimondo’s argument holds water, as Taiwan plays a vital role in the global semiconductor supply chain, and there is the potential for major disruption should China choose to invade the island nation. Intel would be the natural alternative, as the company is building new plants in four U.S. states to strengthen its position as a foundry service provider.
Intel’s foundry initiative has faced setbacks and delays, including a recent rejection from Broadcom. However, Intel did achieve a notable win when it announced that Microsoft plans to use Intel’s foundry operations to manufacture a custom computing chip with its 18A technology. Despite these efforts, Intel’s foundry division’s losses have deepened, and the company expects the foundry business’s operating losses to peak this year.