Intel logo. /AFP-Yonhap
Amid a persistent semiconductor shortage driven by surging artificial intelligence (AI) demand, U.S. chipmaker Intel has reportedly secured some of the production volumes that Taiwan Semiconductor Manufacturing Co. (TSMC), the world’s largest foundry, cannot handle. This “TSMC trickle-down effect” has been seen as a critical factor for the revival of Samsung Electronics’ loss-making foundry business. However, Intel—backed by full U.S. government support—is now poised to capitalize on TSMC’s overflow first, raising the possibility that Intel, once on the brink of business crisis, could re-emerge as a strong competitor to Samsung’s foundry division.
Taiwan’s Digitimes reported on the 28th that Apple and NVIDIA, TSMC’s largest customers, have shifted part of their semiconductor orders to Intel. According to the report, since Intel’s foundry has no prior experience mass-producing large-scale external orders, the two companies decided to transfer lower-risk products first. Apple will produce its entry-level M-series processors for MacBooks at Intel, while NVIDIA will manufacture its budget gaming GPUs there. This order gives Intel a prime opportunity to showcase its foundry capabilities to major clients like Apple and NVIDIA. If mass production succeeds, U.S. big tech firms could entrust Intel with high-value advanced chip production, aligning with the Trump administration’s semiconductor self-reliance goals. For Samsung, which is aiming for a foundry rebound, this development could act as a setback.
**Intel Gaining Geopolitical Advantages**
Industry analysts suggest Intel’s early access to TSMC’s overflow stems more from geopolitical advantages than technological superiority. As a “national foundry” backed by the U.S. government, Intel is exempt from Trump administration tariffs due to its domestic production.
Intel secured a $5 billion investment from NVIDIA last September, as the company sought to improve ties with the U.S. government amid export restrictions. NVIDIA plans to produce part of its next-generation AI accelerator, “Feynman” (scheduled for 2028 release), using Intel’s 14A (1.4-nanometer equivalent) process. However, NVIDIA aims to first verify Intel’s capabilities by allocating some entry-level production volumes before committing core products.
Apple, which relies heavily on Taiwan and China for semiconductor and electronics manufacturing, has faced persistent pressure from the Trump administration to shift production to the U.S. Choosing Intel appears to be Apple’s response to this pressure. Since 2016, Apple has avoided outsourcing chip production to Samsung Electronics, its smartphone rival, over fears of technology leaks. With TSMC as its sole alternative, Intel becomes Apple’s only viable option. Leveraging full U.S. government support, Intel has already secured foundry orders from Microsoft, Amazon, and the U.S. Department of Defense.
**Samsung Electronics Foundry’s Strategy**
While Intel rises with U.S. government and big tech backing, Samsung Electronics announced on the 29th during its earnings report that it aims to increase AI semiconductor orders for its 2-nanometer process by over 130% compared to the previous year. Highlighting its unique strength as the only semiconductor company with logic, memory, foundry, and packaging facilities, Samsung stated that its 2-nanometer process yield has stabilized to enable mass production. Following last year’s order from Tesla, the company is in active discussions with large U.S. and Chinese clients. Samsung also expects to secure customer orders once its Taylor, Texas foundry begins mass production in the second half of this year. Kim Dong-won, head of KB Securities’ research division, noted, “While Intel lacks a proven track record for large-scale production, Samsung’s foundry business is likely to turn profitable next year, driven by expanded Tesla AI chip supplies.”
Intel Secures TSMC Overflow Orders, Challenging Samsung Foundry
Intel Secures TSMC Overflow Orders, Challenging Samsung Foundry Apple, NVIDIA shift entry-level production to Intel, complicating Samsungs foundry revival
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