Donald Trump’s government is in negotiations to acquire about 10% stake in Intel, according to an employee of the White House and others aware of the matter, as it could turn the US into the largest shareholder of the difficult -to -difficult chip manufacturer.
According to sources heard on anonymity, the administration evaluates converting part – or even all – of the subsidies granted to the company by Chips and Science ACT to the company’s shares. Intel was selected to receive $ 10.9 billion in subsidies for commercial and military production.
This amount is close to what is necessary to play the considered slice. Due to the current market assessment, a 10% share in Intel is equivalent to US $ 10.5 billion. The exact size of the slice and the decision to take the plan further are still open, the sources said.
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A White House spokesman Kush Desai refused to comment on the details, just saying “no agreement is official until it was announced.” The Department of Commerce, responsible for Chip Act, did not comment either. Intel did not respond to requests for positioning.
The government also considers the possibility of converting other Act chips subsidies to equity participation, but it is unclear whether this idea has gained support within the administration or has already been discussed with other companies.
Intel in Crisis
A central issue is whether government help can reverse the Intel crisis. The company faces stagnant sales, recurring losses and difficulty recovering technological leadership in the sector. The new CEO, Lip-BO Tan, tries to restructure the company, focusing on cost cuts and layoffs.
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The initial news of a possible federal investment has boosted Intel’s actions, which had the highest rise since February. However, after Bloomberg revealed the latest negotiations, the papers retreated 3% on Monday.
It is noteworthy that if the plan advances, Intel would not necessarily receive more resources than it was expected, only at a faster pace. Like the other beneficiaries of the Act chips, the company should receive the money over time as it met agreed goals. Until January, he had received $ 2.2 billion.
It is unclear whether this amount would be part of the eventual conversion into stocks or if there have been new transfers since Trump took office. Most of the subsidies of the law passed in 2022 were released during Biden management.
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Tan was with Trump at the White House last week, which paved the way for the negotiation. Before critic of the executive for his ties with China, the president changed his tone and praised the CEO, saying that he had “an incredible story.” Sources claim that Tan will remain in office.
Intel’s future has worked Washington for years. The American pioneer was behind the Taiwan Semiconductor Manufacturing Co. (TSMC), the world leader in the manufacture of advanced semiconductors. This hinders the efforts to bring back to the US to chip production, which has migrated to Asia in recent decades.
Although TSMC and South Korean Samsung Electronics expand operations on American soil, the government see how strategic have to have cutting-edge chips within the country. Still under Biden, unlikely mergers were even considered, as with Globalfoundries. Trump’s team discussed whether TSMC could operate Intel’s factories, an idea that did not advance. The hypothesis of seeking investment from the United Arab Emirates was also raised.
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If confirmed, the shareholding of Intel would add to a recent standard of greater government intervention in strategic sectors. Trump’s team has already secured 15% of the revenue of some chip sales to China and has taken a “golden action” at US Steel as a condition to authorize its sale to a Japanese group.
In another unpublished movement, the Department of Defense last month announced the acquisition of US $ 400 million in preferred actions of the American Rare Land Producer MP Materials Corp., becoming its largest shareholder, with about 15% of the company.
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