It turns out that Intel CEO Pat Gelsinger's remarks about Taiwan angered TSMC and caused the company to lose price discounts

It has been revealed that Pat Gelsinger, who has been Intel's CEO since 2021, lost out on a significant discount from TSMC due to careless remarks about Taiwan.

Special Report: Inside Intel, CEO Pat Gelsinger fumbled the revival of an American icon | Reuters
https://www.reuters.com/technology/inside-intel-ceo-pat-gelsinger-fumbled-revival-an-american-icon-2024-10-29/

Although Intel has the ability to design and manufacture chips in-house, its foundry division, which is responsible for manufacturing, is lagging behind other companies and cannot manufacture cutting-edge chips, so from around 2021, it began outsourcing the production of CPUs to TSMC, a foundry company based in Taiwan.

Market research firm predicts that Intel will outsource CPU manufacturing to TSMC, with production of entry-level CPUs to begin in 2021 and mid-range and high-end CPUs to begin in 2022 - GIGAZINE

According to information obtained by Reuters from sources, TSMC offered Intel a discount of around 40% on the cost of manufacturing 3nm wafers.

However, Gelsinger placed more importance on restoring its own manufacturing capabilities than building a relationship with TSMC, and in May 2021, he said, 'It is not desirable to bet all of our eggs in the Taiwanese factory.' Upon hearing this statement, TSMC founder Morris Chang criticized him as 'very rude.' 'I have met all the CEOs of Intel, and when I met him five years ago, Gelsinger was already a bit cocky. Now he is very rude to TSMC, so I will treat him as he does to us,' he said.

Intel CEO Pat Gelsinger a 'very discourteous fellow,' TSMC founder says - YouTube


Gelsinger also described Taiwan as 'not a stable place' in December 2021. When asked for comment, TSMC CEO Mark Liu responded, 'There is nothing to be done' and 'Not many people would believe Gelsinger's claims.'

TSMC chairman dismisses Intel CEO's remarks - Taipei Times
https://www.taipeitimes.com/News/biz/archives/2021/12/04/2003768960

Although TSMC did not show any significant reaction on the surface, in reality it withdrew the 40% discount it had offered to Intel, which resulted in a significant drop in Intel's profit margins.

Building a modern semiconductor factory costs trillions of yen. Intel has invested more than $60 billion (about 9.2 trillion yen) in semiconductor factories to become the world's second largest foundry , and has introduced a new manufacturing process called 'Intel 18A', but poor yields have been reported.

Why it costs trillions of yen to build a modern semiconductor factory - GIGAZINE

The second quarter 2024 financial results announced on August 1, 2024, recorded a deficit of more than 240 billion yen . Intel's difficult situation continues, with its stock price falling to its lowest since 2013 .

While some have called for Intel to split off its foundry business as part of its revival plan, Gelsinger remains confident in the company's restructuring plan, saying, 'We're confident we can succeed.'