Washington in Talks With Chipmakers About Building US Factories

Intel CEO Bob Swan wrote a letter to the Department of Defence in late March in which he expressed the company's willingness to build a factory.

By Reuters | Updated: 11 May 2020 17:41 IST

Washington in Talks With Chipmakers About Building US Factories

It comes amid increasing diplomatic tensions between the US and China during the coronavirus outbreak

Highlights

Intel is in discussions with US over improving domestic microelectronics
TSMC, on the other hand, has been in talks about building a factory
Intel CEO has expressed willingness to build a foundry

The Trump administration is in talks with semiconductor companies about building chip factories in the United States, representatives from two chipmakers said on Sunday.

Intel is in discussions with the United States Department of Defense over improving domestic sources for microelectronics and related technology, Intel spokesman William Moss said in an emailed statement.

"Intel is well positioned to work with the US government to operate a US - owned commercial foundry and supply a broad range of secure microelectronics", the statement added.

Taiwan Semiconductor Manufacturing (TSMC), on the other hand, has been in talks with the US Department of Commerce about building a US factory but said it has not made a final decision yet.

"We are actively evaluating all the suitable locations, including in the US, but there is no concrete plan yet", TSMC spokeswoman Nina Kao said in a statement.

Intel Chief Executive Bob Swan wrote a letter to the Department of Defence in late March in which he expressed the company's willingness to build a foundry - a term used in the industry to reference a chip factory - in partnership with the Pentagon.

"This is more important than ever, given the uncertainty created by the current geopolitical environment", Swan wrote in the letter dated March 30 and seen by Reuters on Sunday.

It comes amid increasing diplomatic tensions between the US and China during the coronavirus outbreak, with both sides trading barbs over who is to blame for the spread of the disease after already being involved in trade tensions for almost two years.

"We currently think it is in the best interest of the United States and of Intel to explore how Intel could operate a commercial US foundry to supply a broad range of microelectronics," the letter from the Intel CEO added.

The Trump administration's discussions with chipmakers were reported earlier by the Wall Street Journal, with the report adding that TSMC also has been talking with Apple, one of its largest customers, about building a chip factory in the United States.

TSMC declined to comment on the talks with the iPhone maker.

The Journal had also reported that US officials are looking at helping South Korea's Samsung, which has a chip factory in Austin, Texas, to expand its contract-manufacturing operations in the United States. A Samsung spokeswoman in Seoul declined to comment on Monday.

The US Commerce Department and Apple did not respond to requests for comment on Sunday.

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