Trump (R) Administration Officials are Discussing taking a 10% Stake in Intel, as part of a Government effort to Rescue the Embattled Chip Maker and Bolster Semiconductor Manufacturing in the U.S.. The Structure and Terms of the Equity Investment haven’t been Finalized, but the Conversations, add to a Dramatic Saga unfolding for the Company in Washington.
Talks between the White House and Intel intensified earlier this month, when Trump called for Chief Executive Lip-Bu Tan to Resign over His ties to China. Tan visited Trump last Monday in the White House, and the Two Men discussed the Idea of a Government Stake during their Meeting. Intel Shares closed down 3.7% Monday, paring some of their recent Rebound following Reports that the Government might Invest. Bloomberg News earlier Reported Discussions of the 10% Stake.
One Option under consideration is Converting some of the Money that Intel was slated to Receive from the 2022 Chips and Science Act, into an Equity Stake. Commerce Secretary Howard Lutnick (R) is Searching for ways to Improve the Return on Investment from the Funds Granted to Companies like Intel under the Law.
Intel was the Biggest Beneficiary of the Law, the Biden (D) Administration announced in 2024 that Intel was Eligible to Receive about $8 billion for New or Expanded Chip-Fabrication Facilities in Ohio and around the U.S. The Company would get the Money after Meeting certain Milestones. Lutnick believes that Converting those Funds into an Equity Stake in Intel might be the Best way for the Government to Bolster the Company while Protecting Taxpayer Interests, the Person said.
The Ohio Facility has been Delayed by many years, Angering Lawmakers who feel Intel Misled the Government when the Money was Awarded. That Annoyance has Compounded concerns about Tan’s Business Relationships in China. The Exact value of the 10% Stake in Intel is still under Discussion. Intel has a Market Value of about $100 billion. A 10% Stake would make the Government One of the Company’s Largest Shareholders.
The Administration has been looking for ways to Boost American Market Share in Semiconductor Manufacturing. Officials have described Intel as the U.S. Company with the Best chance of taking on Taiwan Semiconductor Manufacturing Co., the Dominant Player in Chip Fabrication, because it both Designs and Fabricates Chips. Many Tech Companies have been Rushing to Boost or Emphasize their U.S. Investments to Win Favor with Trump and get Favorable Policies. An Intel Stake Deal would be the Latest of Trump’s Personal Interventions in the U.S. Private Sector.
Trump recently Secured a Commitment by Nvidia and Advanced Micro Devices, to Pay the Government 15% of their Chip Sales in China, in Exchange for Export Licenses. In Nippon Steel’s takeover of U.S. Steel, He received a “Golden Share” giving Him Sway over how the Company Operates. Intel Shares have Tumbled more than 50% since the Start of 2024 as the Once-Storied Chip Maker Copes with Ballooning Costs and a Product Line that Industry Analysts say is Outdated for the Age of Artificial Intelligence.
Tan has been trying to Turn the Company around, since taking the Helm in March. He Succeeded Pat Gelsinger, who left the Company late last year after making the Chips Act Funding a Key Part of His Strategy.
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