America first and AI: Could Trump engineer Intel's comeback?

In a dramatic turn of events that aligns perfectly with President Trump's "Made in America" vision, Intel Corporation's stock has surged over 16% as rumors circulate about a partnership with Taiwan Semiconductor Manufacturing Company (TSMC). This potential collaboration represents a significant step toward returning advanced semiconductor manufacturing to American soil, a key priority of Trump's economic nationalism agenda.

The Trump effect on American chip manufacturing

The recent market excitement stems from reports that TSMC might acquire a 20% stake in Intel's Foundry Services (IFS) business, a move that echoes Trump's persistent calls for bringing critical technology manufacturing back to the United States. This development gained particular momentum following Vice President JD Vance's recent remarks in Paris emphasizing the crucial importance of manufacturing advanced semiconductors on American soil.

The proposed partnership structure carefully navigates anti-trust concerns while potentially revolutionizing domestic chip production. The 20% stake represents a sweet spot that would enable collaboration without triggering regulatory red flags-a careful balance that reflects the Trump administration's approach to fostering American manufacturing while maintaining market competition.

Strategic implications and national security

This potential deal extends beyond mere business strategy- it represents a crucial step in securing America's technological independence, a cornerstone of Trump's economic policy. The partnership could receive substantial support through the CHIPS Act, legislation that emerged from Trump-era initiatives to strengthen domestic semiconductor production.

Key industry players Qualcomm and Broadcom are reportedly considering supporting the venture, potentially placing orders with the new entity. This would create a robust American semiconductor ecosystem capable of competing with Asian manufacturers like MediaTek, particularly in markets where Chinese giant Huawei faces restrictions.

While Intel has faced recent setbacks, including a $13.4 billion loss in its foundry business and the departure of CEO Patrick Gelsinger, the company maintains significant technological advantages. Intel's position as the first recipient of ASML's advanced high NA EUV chip manufacturing machines demonstrates its continued leadership in cutting-edge technology.

The road ahead and technical outlook

The potential restructuring faces several hurdles, including regulatory scrutiny and the technical challenges of integrating different manufacturing processes. However, the market's enthusiastic response-with Intel's shares gaining 22.5% over five days and 16.7% year to date-suggests strong confidence in this strategic pivot.

This deal, if realized, would represent a significant victory for American manufacturing and technological sovereignty-key themes of Trump's economic vision. While Intel's shares remain down 46% compared to last year, this potential partnership could mark the beginning of a new era in American semiconductor manufacturing, fulfilling Trump's promise to revitalize domestic high-tech production.

As global tensions heighten the importance of secure supply chains, this potential collaboration between Intel and TSMC could reshape the semiconductor landscape while strengthening America's position in advanced technology manufacturing-a goal that has been central to Trump's industrial policy vision.

At the time of writing, the stock is rebounding after a recent pullback. There is clear bullish bias based on recent performance, however, RSI retreating sharply from the overbought territory hints at incoming selling pressure. Key levels to watch will be $26.33 and recent highs of $27.38. On the downside, key levels to watch will be $24.53 and $22.85.

Source: Deriv MT5

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