TSMC, the world’s most valuable semiconductor company, was planning to offer Intel a generous discount as part of its chip-printing deal for new 3-nanometer processors—a whopping 40%, to be exact—but TSMC ended up retracting the offer after Intel CEO Pat Gelsinger called out Taiwan, telling people that the island, among other things, was not “a stable place,” according to a new report. “You don’t want all of your eggs in the basket of a Taiwan fab,” Gelsinger is reported to have said in May 2021 before going on later that year to question whether being dependent on Taiwan makes sense amid a scenario in which China had sent 27 military warplanes into the island’s defense identification zone. Morris Chang, TSMC’s founder, called Gelsinger “very discourteous” and “a bit rude,” per a local news segment from October 2021 that remains available to watch below.
Intel had a sweet deal going with Taiwan’s TSMC, the giant manufacturer of semiconductors for other companies. TSMC would make chips that Intel designed but could not produce. And it was offering deep discounts to Intel, say four people with knowledge of the agreement.
Instead of nurturing the relationship, Gelsinger – who hopes to restore Intel’s own manufacturing prowess – offended TSMC by calling out Taiwan’s precarious relations with China…TSMC said it would no longer honor the discount, the sources said: about 40% off the $23,000, 3-nanometer wafers on which TSMC would print chips for Intel. Intel had to pay full price, shrinking its profit margin on the deal.