Intel has faced significant challenges recently, particularly in relation to its partnership with TSMC. CEO Patrick Gelsinger’s statements regarding geopolitical risks connected to Taiwan have reportedly strained this important relationship, resulting in Intel losing a 40% discount that TSMC had previously offered for its advanced 3nm chip technology.
According to WCCF Tech, Gelsinger has emphasized the dangers of concentrating chip production in Taiwan as part of his efforts to promote domestic manufacturing and secure subsidies from the U.S. government. These remarks have sparked a backlash from TSMC, particularly from its founder, Morris Chang, who has accused Gelsinger of capitalizing on the political landscape to benefit Intel.
As a consequence of the deteriorating relationship, TSMC withdrew its discount, which has notably impacted Intel’s profitability, forcing the company to purchase 3nm products at full price. Beyond losing this key discount, Intel is also grappling with other setbacks, including the cancellation of a contract for self-driving chips with Alphabet and challenges surrounding the mass production of its 18A chip technology.
Gelsinger’s remarks have placed Intel in a precarious position, hindering progress toward its objectives while straining crucial partnerships and adversely affecting the company’s financial outcomes.