The Trump administration is holding discussions with chipmaker Intel Corp. (INTC) and Taiwan Semiconductor Manufacturing Co. (TSM) about building chip factories in the U.S., according to a Reuters report.
The report cited Intel spokesman William Moss saying that the chipmaker is in discussions with the U.S. Department of Defense over improving domestic sources for microelectronics and related technology.
“Intel is well positioned to work with the U.S. government to operate a U.S.-owned commercial foundry and supply a broad range of secure microelectronics”, Intel said.
According to the report, Taiwan Semiconductor has not made a final decision about building a U.S. factory.
“We are actively evaluating all the suitable locations, including in the U.S., but there is no concrete plan yet”, Taiwan Semiconductor said.
U.S. officials and executives are concerned about protecting global supply chains from disruption as the coronavirus-related lockdown orders are delaying or putting a halt to factory production. The talks come also at the back of diplomatic tensions between the U.S. and China during the coronavirus outbreak, with both sides arguing over who is to blame for the spread of the disease after already being involved in trade tensions for almost two years.
Taiwan Semiconductor has also been in talks with Apple Inc. (AAPL), one of its largest customers, about building a U.S. chip factory, the Wall Street Journal reported.
Intel shares advanced 31% in the past two months getting closer to their 52-week high. The stock declined 2.9% to $58.39 in U.S. trading on Tuesday.
TipRanks data shows that Wall Street analysts are divided over Intel’s stock with 14 Holds, 11 Buys and 3 Sells adding up to a Moderate Buy consensus. The $62.44 average price target implies 6.9% upside potential in the next 12 months. (See Intel stock analysis on TipRanks).