TSMC’s U.S. Chip Expansion Rattles Silicon Valley—Now Intel (INTC) Must Play Catch-Up

Taiwan Semiconductor Manufacturing Co. (TSMC) just fired the latest salvo in the global chip wars—pumping billions into U.S. fabs while Intel scrambles to reclaim its mojo. Here’s how the semiconductor showdown unfolds.

The stakes: With TSMC’s Arizona plants set to churn out 3nm chips by 2026, America’s tech sovereignty hinges on domestic production. Intel’s delayed process nodes and fab delays leave it vulnerable.

Intel’s move: CEO Pat Gelsinger’s IDM 2.0 strategy—a mix of internal manufacturing and third-party outsourcing—now looks reactive, not revolutionary. Shareholders are antsy as capex balloons.

The wildcard: CHIPS Act funding won’t save laggards. If Intel can’t match TSMC’s yield rates or Apple’s custom silicon deals, it risks becoming a glorified real estate play—with fab shells as its only appreciating asset.

Intel (INTC): The Future Shadowed by TSMC?

Intel (INTC) already sits on the lower shelf of most investment experts’ radars. The stock is rivaled by Nvidia (NVDA), AMD, and plenty of other AI stocks. Intel hasn’t had the best success over the last few years, but has made many moves in the past year to push forward.

For example, a recent Bloomberg report revealed that the chipmaker is planning to cut more than 20% of its staff. The layoffs are part of Intel’s bid to streamline its operations, Bloomberg said. Furthermore, Intel announced the sale of a 51% stake in its Altera chips unit to Silver Lake, a tech-focused private equity firm, in early April. New CEO Lip-Bu Tan has made many moves to try to return Intel to the top of the AI/tech sector. However, the top of that mountain remains very crowded.

This explains why Cramer and other analysts don’t value INTC stock as high as rivals NVDA or AMD. INTC is down 9.7% in the last month, trading at 20.50 on Monday. With TSMC now throwing a wrench in things, investors are mixed on INTC’s future in 2025.