Intel, the nation’s putative semiconductor “national champion” has fallen on hard times. Having led technologically for some decades, Intel fell behind demands for advanced chips after the iPhone emergence and most recently on the burgeoning demand for chips needed for artificial intelligence training.

The Biden administration, and now the incoming Trump administration, seem determined to support and subsidize the US semiconductor industry for competitiveness and security imperatives. A central vehicle for this semiconductor industrial policy initiative is the CHIIPS and Science Act of 2022. In addition to providing substantial sums for R&D, the act provided some $39 billion to advanced semiconductor manufacturing in the US.

Despite this support, Intel’s struggles have continued, and indeed become graver. In 2022, in an attempt to regain technological prowess, the company brought back former CEO Pat Gelsinger, who had led the company before its downward spiral. Gelsinger embarked on a highly ambitious campaign not only to restore Intel’s lead in advanced chip design, but also to compete in the capital-intensive market for manufacturing chips. Over the past three years, while there has been some progress on the design side, Intel has failed to significantly beak into chip manufacturing—even as huge capital costs sapped the company’s resources and undercut investor confidence. Last December, only weeks after the Biden administration signed an agreement to supply some $7.5 billion in manufacturing subsidies for Intel for new “fab” construction, the Intel board fired Gelsinger, leaving the company with interim leadership.

That brings us to the Trump administration. Despite his jabs at the CHIPS Act, President Trump has stated his commitment to reshoring US manufacturing, particularly in strategic technologies like semiconductors (export controls will not hold China back forever).

Thus, the administration should pursue the following strategies:

First, encourage Intel leadership to hive off the chip-manufacturing segment of the company, as either a separate independent element or a totally independent one. Such a move would allow Intel to concentrate solely on advanced chip design. A recent Wall Street Journal thorough analysis showed that Intel faces strong competition from its US and foreign competitors as a result of its own failings and profound changes in the semiconductor design market. It will have a much better chance of regaining at least some of its technological superiority absent the resource-gobbling fab competition. Down the road, the administration would have to decide if further subsidies to Intel are warranted or whether this would be a fruitless and wasteful effort.

Second, should Intel continue to struggle in fab competition, despite the president’s resistance to foreign subsidies, the Trump administration should move with dispatch to sign contracts with TSMC and other manufacturers to fill the gap in future years.

Foolishly and dangerously, President Trump has vowed to put tariffs on semiconductors. TSMC manufactures 90 percent of the world’s most advanced chips and while it is investing in the United States, it will be many years before the US can cease importing these chips from the company.