Trump administration holds talks with Intel, TSMC to bring chip tech back to US shores

The coronavirus pandemic has highlighted how reliant US firms are on the global supply chain.

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The Trump administration is in talks with chip giants including Intel over possible ways to pivot chip production away from Asian sources through the creation of local semiconductor plants. 

As reported by the Associated Press, Intel has confirmed that discussions are being held with the Defense Department, with a possible new manufacturing facility in the US on the cards.

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The talks have been prompted by the COVID-19 pandemic, which has highlighted how the United States relies on the global supply chain -- and in particular, suppliers based in the Asian region -- for the processor technology required by modern electronics. 

Intel already has a substantial presence in the United States, with campuses spread out across areas including Santa Clara, San Jose, and New York. The tech giant also has numerous fab production sites in the country, alongside one testing facility and one assembly development facility. Other sites are spread out across China, Malaysia, and Vietnam, among other countries. 

Companies sometimes choose to establish production facilities in particular regions as outsourcing can cut operating and manufacturing costs. Setting up new semiconductor and "foundry" facilities in the US could lessen reliance on these facilities in the future, and given the economic impact COVID-19 has had on American industry, could also contribute in a small way to job creation and domestic production. 

The Wall Street Journal further reports that Taiwan Semiconductor Manufacturing Co. (TSMC) is also holding talks with the US administration over potential plants. 

TSMC manufactures processors for other companies and counts Apple and Huawei among its biggest customers. Local reports have suggested that TSMC lost orders from Huawei recently, only for its production capacity to be snapped up by Apple for the production of chips potentially for use in upcoming iPhone models.  

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A TSMC spokesperson said the company was "actively evaluating" possibilities surrounding new plants, but added that nothing was "concrete."

Solidifying the US presence of both Intel and TSMC could not only change the supply chain landscape but may also impact the US military sector. Having access to local manufacturers of high-end chips outside of China and Taiwan, for example, could encourage the further development of technological applications designed for military use while also limiting the risk of compromise caused by international supply chain requirements. 

However, it is not as simple as simply giving the green light for new facilities. The novel coronavirus has caused disruption across the board and establishing new facilities requires the investment of millions of dollars at a time when the economic damage of the virus is yet to be determined. It is possible, therefore, that the administration could offer lucrative tax breaks or incentives to sweeten the pot. 

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In related news, at the end of April Intel launched new 10th generation Intel Core desktop S-Series processors designed with power and resource-hungry applications in mind, such as 4K video editing and gaming. 

Among the processor family's improvements are speed boosts of up to 5.3 GHz, a revamped Intel Extreme Tuning Utility for overclocking, and the Intel Turbo Boost Max 3.0 core performance-boosting system. 

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