Former Intel CEO Pat Gelsinger has cast doubt on Taiwan Semiconductor Manufacturing Company’s (TSMC) plans to build fabrication plants in the United States, arguing that the move will do little to advance American semiconductor leadership. Gelsinger emphasized that without robust domestic research and development (R&D), simply manufacturing chips on US soil will not make the nation a global leader in semiconductor innovation.
TSMC’s US Fabs: Manufacturing Without Innovation?
According to a report in the Financial Times, Gelsinger asserted that because TSMC’s R&D efforts remain based in Taiwan, its US facilities will only serve as production hubs, not centers of technological advancement.
“If you don’t have R&D in the US, you will not have semiconductor leadership in the US,” Gelsinger stated.
His argument highlights that while TSMC’s US plants will produce chips, the cutting-edge processes and next-generation nodes will continue to be developed in Taiwan. Thus, America may become a manufacturing outpost rather than a true semiconductor leader, he suggested.
Intel’s Foundry Gamble Under Gelsinger
During his tenure as Intel’s CEO, Gelsinger aimed to transform the company into a powerhouse capable of rivaling TSMC in contract manufacturing. His ambitious $100 billion plan included building new fabs across the US, Europe, and the Middle East, while creating a standalone foundry business. The centerpiece of this strategy was Intel’s advanced 18A manufacturing process, designed to compete with TSMC’s most sophisticated chip-making technology.
However, the strategy faced setbacks. Intel’s foundry business unit posted significant losses, and meaningful production using the 18A process has yet to begin. Moreover, delays in Intel’s fab projects in Ohio pushed their expected completion date to the late 2020s, with operations possibly starting as late as 2030.
TSMC Pushes Deeper Into the US
While Intel struggled with delays, TSMC announced a further $100 billion investment into its US-based chip plants. The move is part of an effort to shield its American clients from potential tariffs and geopolitical risks. The expansion underscores TSMC’s commitment to maintaining strong ties with US tech companies, but without transferring its R&D capabilities stateside.
Gelsinger’s criticism reflects concerns that TSMC’s expansion may not contribute to the US’s technological self-reliance. Instead, the country could merely become an outsourced production center, reliant on foreign innovation.
New Leadership, New Direction?
Gelsinger’s abrupt departure from Intel in December 2024 marked the end of his bold foundry vision. His successor, Lip Bu Tan, now holds the reins, but has yet to announce any significant strategic changes.
In Intel’s recent annual report, Tan expressed continued commitment to Intel’s foundry ambitions. However, he stopped short of fully endorsing Gelsinger’s aggressive contract manufacturing strategy.
“To enable great products, I am equally focused on creating great process technology, which is core to our strategy for building a world-class foundry,” Tan wrote, signaling a potential refinement of Intel’s direction.
Meanwhile, Intel’s board will see three directors step down later this year: Medtronic CEO Omar Ishrak, UC Berkeley College of Engineering Dean Tsu-Jae King Liu, and former University of Pennsylvania professor Risa Lavizzo-Mourey. Their departures may pave the way for new leadership dynamics and strategic shifts.
The Race for Semiconductor Dominance
Gelsinger’s parting remarks highlight the broader struggle for technological dominance in the semiconductor industry. While TSMC’s US expansion strengthens its manufacturing footprint, Intel’s delayed foundry ambitions and leadership changes leave its future uncertain.
The battle for semiconductor supremacy will likely hinge not just on fabrication capacity but also on the location of cutting-edge R&D. Without it, Gelsinger warns, America risks becoming a secondary player in the global chip race, even with fabs on its soil.
