Intel is in discussions with the US Department of Defense while TSMC is talking to the US Department of Commerce, the report said. Samsung is also being approached to boost its Austin, Texas, facility, according to other reports.

Reuters states that Intel CEO Bob Swan wrote a letter to the Department of Defense in March offering to build a foundry in partnership with the DoD. “We currently think it is in the best interest of the United States and of Intel to explore how Intel could operate a commercial U.S. foundry to supply a broad range of microelectronics,” the report quotes Swan saying in the letter.

However, it is notable that Intel, historically a supplier of high volume PC and networking chips, has tried to be a commercial foundry supplier of custom chips multiple times in its history and failed. The need to be customer-centric, flexible and to make numerous designs of ICs in varying volumes has been at odds with its traditional strength of optimizing a leading-edge design for performance and high volume manufacture.

And Intel has been losing its manufacturing prowess as problems with moving through the FinFET nodes have left the company trailing Taiwan Semiconductor Manufacturing Co. Ltd. in terms of process technology. Intel is a 14nm moving to 10nm while TSMC is in high demand to produce circuits on 7nm and 5nm. That said the process nodes are more nominal and are more suitable for comparison within a company than across companies.

Next: Meanwhile TSMC

While Intel has been offering itself to the DoD, TSMC has been in talks with the US Department of Commerce, the report said. The possibility of TSMC building a wafer fab in the US has been on the table for a couple of years and TSMC raised the prospect again this month (see TSMC is planning a US wafer fab . . . again). “We are actively evaluating all the suitable locations, including in the US, but there is no concrete plan yet,” Reuters quoted TSMC spokeswoman Nina Kao as saying.

Chip companies are fully aware that the building of a wafer fab can create a high-value job-creation hub and therefore expect local or national authorities to subsidize their efforts with tax breaks and other in-kind inducements usually up to about a third of the prospective life-time cost of the wafer fab.

The latest discussions come amid US-China political and trade tension much of it centred around the rise of Huawei as the world’s largest communications equipment company and China’s aspirations in technology-based industries.

TSMC is a major supplier to China and Huawei, In 2019 China was responsible for approximately 20 percent of its sales with HiSilicon/Huawei alone buying 14 percent. However, the US, where the majority of fabless chip vendors are headquartered, is responsible for 60 percent of TSMC sales with Apple remaining its number one customer with 23 percent of TSMC’s output on its own.

At the same time the third major digital chip manufacturer Samsung Electronics has a relatively mature wafer fab campus in Austin Texas. It has been reported that US officials have been encouraging Samsung to expand foundry manufacturing there.

The US has also put some support into SkyWater Technology Inc. (Bloomington, Minnesota) as a trusted manufacturing partner (see SkyWater funded to expand, develop next rad-hard process). However, this former Cypress Semiconductor fab, is of small size and is really being treated as innovation and process development location. It can provide manufacturing for some highly specialized, low volume requirements that do not need the smallest geometries but cannot meet the volume requirements to provide independence across the breadth of electronics.

Related links and articles:

Reuters article

News articles:

TSMC is planning a US wafer fab . . . again

Analysis: TSMC ponders US wafer fab while awaiting trade rule changes

SkyWater funded to expand, develop next rad-hard process

ST deal won’t shield Huawei, but could help

HiSilicon breaks into top ten chip vendor ranking

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