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AMD has lagged behind Nvidia in the AI business but has done well in the federal supercomputing business, holding numerous top spots with supercomputers like El Capitan and Frontier. Manufacturing its chips in the United States would be a good way to get the Trump administration off its back given its push for domestic manufacturing of semiconductors.
The Trump administration is pushing for 50% of chips sold in America to be manufactured domestically, and tariffs on chips that are not. It also faces outbound restrictions. Earlier this year, AMD faced export restrictions GPUs meant for China as part of U.S. export controls against China’s AI business.
“I believe this is a smart move by AMD to secure capacity in the local market without fighting against Nvidia and Apple and their deeper pockets for the limited capacity at TSMC,” said Alvi Nguyen, senior analyst with Forrester Research.” With the US investment in Intel, followed by Nvidia, this is can be seen as diversifying their supply chain and providing cheaper, locally sourced parts.”
For Intel, this will continue a streak of good news it has enjoyed recently. “Having customers take up capacity at their foundries will go a long way in legitimizing their semiconductor processes and hopefully create the snowball effect of getting even more US-based customers,” said Nguyen.
In recent weeks, Intel has partnered with Nvidia to jointly make PC and data center chips. Nvidia also took a $5B stake in Intel. Earlier the Trump administration made a $11.1B, or 10%, stake in Intel.