In a significant move that has captured the attention of the technology industry, Taiwan Semiconductor Manufacturing Company (TSMC), renowned as the worlds largest chipmaker, has officially dismissed any rumors of a collaboration with its struggling American competitor, Intel. This statement marks TSMC's first public response to speculations fueled by officials from the Trump administration regarding a potential partnership between the two firms.

During a recent investor meeting, TSMC's Chief Executive Officer, CC Wei, emphatically stated that the company is not engaged in any discussion with other companies regarding any joint venture, technology licensing, or technology transfer and sharing. This firm assertion comes in the wake of ongoing discussions over the past couple of months, which suggested that TSMC might consider taking a minority stake in Intel. Such a move would help the beleaguered US chipmaker enhance its manufacturing facilities, known as fabs, which have struggled to keep pace with the advanced technology produced by TSMC.

Wei has consistently maintained that TSMC has no interest in Intels fabrication plants, although Intel itself is a customer of TSMC. According to various insiders familiar with the situation, this position remains unchanged despite persistent pressure from officials within the Trump administration urging TSMC to assist in revitalizing Intels operations.

Industry experts have warned that transforming Intel's fabs to meet TSMCs high standards would require an extensive amount of time and financial investment, potentially exceeding the costs of constructing new facilities. This proposed Intel partnership reflects the broader upheaval within the technology sector driven by the Trump administration's tariffs and industrial policies, which aim to reshape America's tech landscape.

Despite these challenges, TSMC remains optimistic about its growth trajectory, maintaining a forecast of nearly 25% growth for the year, primarily fueled by a surge in revenue from artificial intelligence chip production. However, Wei cautioned that US trade policies could erode profit margins and dampen demand. He stated, We are mindful of the potential impact of all the recent tariff announcements, especially on end demand. Having said that, we have not seen any change in our customers behavior right now, so we stick to our forecast.

In light of the tariffs imposed by the Trump administration, many of the United States' key trading partners, including Taiwan, are engaged in negotiations to alleviate the steep tariffs that were introduced earlier and subsequently put on hold. Concurrently, the US government is exploring the possibility of implementing additional tariffs across the entire technology hardware supply chain. This would encompass semiconductors, various components, and the machinery required for their production, as well as a wide range of downstream products that incorporate these technologies.

Amidst calls for action from the Trump administration, TSMC committed last month to significantly ramp up its investment in manufacturing capacity within the United States, pledging over $165 billion. This investment will facilitate the construction of six fabs, along with two advanced packaging facilities.

TSMC has provided further details on these investments, indicating a concerted effort to expedite the timeline for commercial production at its second factory in Arizona, which is currently scheduled to commence operations in 2028. Wei mentioned that TSMC aims to advance this timeline by a couple of quarters at least. This initiative is seen as a critical step in narrowing the technological gap between cutting-edge chip production facilities in Taiwan and those in the United States.

The second fab in Arizona is expected to produce 3-nanometer chips, which will be one generational leap behind the 2-nanometer chips that are set to begin production in Taiwan within this year. However, management has warned that tariffs might further impact the companys gross margins over the next five years. This comes at a time when the company is already grappling with the higher construction and operational costs associated with expanding its facilities abroad compared to its home base in Taiwan.

Wendell Huang, TSMC's chief financial officer, stated that the anticipated gross margin dilution, previously projected at 2 to 3 percent annually, could increase to as much as 4 percent towards the end of the five-year period due to these evolving circumstances.

According to Wei, once all of TSMCs planned fabs in the US are operational, roughly 30 percent of the companys capacity for 2-nanometer and newer process technology will be situated in Arizona. This aligns with analyst projections but is expected to be fully realized by approximately 2030 or later.

In its latest financial report, TSMC announced a remarkable 60 percent increase in net profit for the first quarter of 2025 compared to the same period last year. The company's net income surged to NT$361.56 billion (approximately $11.13 billion), driving the gross margin up to 58.8 percent, nearing the upper end of the companys previous guidance. Additionally, revenues soared by 41.6 percent to NT$839.3 billion, aligning with TSMCs earlier projections made in January.