<div id="readability-page-1"><div><div>Intel Corp's INTC relationship with Taiwan Semiconductor Manufacturing Co. TSM soured years back — and it all traces back to comments that left TSMC's legendary founder unimpressed.<h2>Gelsinger's Remarks On Taiwan Sparked Tensions With TSMC</h2>When Pat Gelsinger returned to Intel as CEO in 2021, he was hailed as a technologist who could revive the struggling chip giant. But only months into his tenure, he sparked tensions with TSMC by publicly questioning Taiwan's stability.&#34;You don't want all of your eggs in the basket of a Taiwan fab,&#34; he said in a May 2021 interview, later telling Fortune, &#34;Taiwan is not a stable place.&#34;The remarks were reportedly viewed as a slight against the island, which faces constant pressure from neighboring China. TSMC founder Morris Chang publicly brushed off the comments at the time but later described Gelsinger as &#34;a bit rude,&#34; reported Reuters.Chang also reportedly described Gelsinger as a &#34;very discourteous fellow,&#34; according to a 2021 report by Formosa News, a Taiwan-based broadcaster.Privately, Reuters reported, TSMC revoked a lucrative discount Intel had been enjoying on its most advanced 3-nanometer wafers — roughly 40% off the $23,000 price tag.&#34;TSMC deals with Intel the way Intel deals with TSMC,&#34; Chang later said.<h2>From Sweetheart Deal To Sour Relations</h2>The loss of the discount significantly hurt Intel's profit margins. Once a dominant force in chipmaking, Intel had already ceded ground to TSMC, Samsung Electronics Co. SSNLF and Advanced Micro Devices, Inc. AMD.The strained relationship added another hurdle just as Intel was trying to reinvent itself as a contract foundry.According to people familiar with the matter, Intel not only lost its pricing edge but also credibility in securing external foundry clients. Gelsinger had set high expectations for Intel's 18A process technology, but persistent yield issues and delays left customers hesitant, Reuters reported in 2024.<h2>AI Shift And Mounting Competition</h2>The timing could not have been worse. In November 2022, OpenAI's ChatGPT launched, igniting a global boom in artificial intelligence.Nvidia Corporation's NVDA graphics processing units became indispensable to power AI models, tripling the company's stock in under a year.Intel, meanwhile, scrambled to push its Gaudi AI accelerators — made by TSMC — as alternatives, but adoption lagged.By 2023, Intel's revenue had plunged to $54 billion, nearly one-third lower than when Gelsinger took the helm. In 2024, its foundry business posted an $18.8 billion loss, even after receiving $8.5 billion in U.S. subsidies.<h2>Intel's Struggles Continue</h2>Intel's latest earnings highlight the ongoing challenges. In July 2025, the company reported second-quarter revenue of $12.86 billion, topping Wall Street expectations. But it still posted an adjusted loss of 10 cents per share, missing forecasts of a small profit.Intel appointed Lip-Bu Tan as CEO in March 2025, succeeding Gelsinger. Tan previously got praises from Chang, who lauded his leadership in transforming Cadence Design Systems from a struggling firm in 2009 into a strong company.In April 2025, it was reported that Intel and TSMC held talks on a preliminary deal to form a joint venture to run Intel's factories.Intel shares have also been surging this week after SoftBank Group SFTBF SFTBY agreed to invest $2 billion, amid reports that the Donald Trump administration is considering taking a 10% stake in the company.Price Action: Intel shares have risen 16.88% over the past five days. On Tuesday, the stock climbed 6.97% during regular trading but dipped 1.15% after hours, according to Benzinga Pro data.Benzinga's Edge Stock Rankings show Intel maintaining strong upward momentum across short, medium and long-term periods. Additional performance details are available here.<ul> <li>Cathie Wood Dumps Palantir As Stock Touches Peak Prices, Bails On Soaring Flying-Taxi Maker Archer Aviation</li> </ul>Photo Courtesy: Glen Photo on Shutterstock.com</div></div></div>

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Intel's relationship with TSMC soured after CEO Pat Gelsinger questioned Taiwan's stability, leading to TSMC revoking Intel's discount on advanced wafers. This strained relationship has hurt Intel's profit margins and credibility in securing foundry clients. As AI demand surged, Intel struggled to compete, with revenue dropping significantly. Despite a recent rise in stock prices following SoftBank's investment, Intel continues to face challenges, including a reported loss in its foundry business and leadership changes.

- Intel Corp's relationship with TSMC deteriorated after CEO Pat Gelsinger questioned Taiwan's stability in 2021, leading to TSMC revoking Intel's significant wafer discount.  
- This strained relationship has hindered Intel's efforts to regain market share and credibility, especially amid rising competition in AI and significant revenue declines.  
- Despite recent talks of a joint venture and a surge in stock prices following investments, Intel continues to face challenges, including a reported loss in its foundry business.  

TSMC Legend Morris Chang Once Branded Former Intel CEO 'Rude' Over 'Taiwan Is Not A Stable Place' — Today, Intel Struggles In The AI Landscape