Intel has become a few days in the summer fashion technology company. But the events rushed in the worst way last week, when the president of the United States, Donald Trump, whom he accused of being in a “very conflictive” situation due to the concerns about his alleged ties with China. Then they gathered and limited roughness and last Thursday the possible interest of the US Government leaked
This Monday, the rumor was completed something else: it is in conversations to acquire a participation of approximately 10%, according to a White House official and other people familiar with the matter collected by Bloomberg. This measure could make the United States the largest shareholder of the troubled chips manufacturer. Almost in parallel, it has been known that the Japanese bank Softbank intends to buy 2,000 million dollars in technological shares.
The US government movement would imply converting part of the subsidies that the company has received. Specifically, Intel has been selected to receive a combined total of 10.9 billion dollars in subsidies of the special law related to chips for commercial and military production. The company can also access loans for up to 11,000 million dollars according to another law of 2022.
The money from the subsidies, which was originally designed to be gradually distributed as Intel fulfilled project milestones, is approximately sufficient to cover the participation marked as an objective. With the current market value of Intel, a 10% share in the chip manufacturer would be worth around 10,500 million dollars. The exact size of participation, as well as if the White House decides to move forward with the plan, they are still under discussion, the sources said.
White House spokesman Kush Desai declined to comment on the specific details of the conversations, and just said that no agreement is official until it is announced by the administration. The Commerce Department, which supervises the new regulations, also refused to comment. Intel did not respond to a request for comments.
What is most specified is that Intel has also attracted the Japanese group Softbank to its shareholders with 2,000 million in purchases. This transaction represents a sample of confidence by the Japanese technological giant, which is expanding its investments in the US.
Investors initially received with pleasure in the session of Wall Street the news that the Government could invest in Intel, which caused the greatest weekly rebound in the company’s shares since February. However, Intel’s actions fell 3.7% on the potential size of government participation, before recovering with the announcement of the agreement with SoftBank.
A great unknown is whether government participation in capital would help revitalize Intel business. The company suffers from stagnant sales and continuous losses, and has had difficulty recovering its technological leadership. The new executive director, Lip-Bu Tan, seeks a recovery, but their efforts have focused mainly on reducing costs and eliminating jobs.
Intel will only add large -scale manufacturing capacity once customers commit themselves to use their most advanced production techniques, he said so last month, which generated concern among investors that the company is renouncing the race for leadership in semiconductors.
The Trump administration is especially focused on supporting the broad Intel project in Ohio, native state of vice president JD Vance. Intel has repeatedly delayed the planned opening of that site, which originally imagined as the largest installation of semiconductors in the world.
Beyond Intel, the White House official also raised the possibility of the administration to convert other awards of the law on chips into shareholdings.
The law allocated 39,000 million dollars in subsidies for manufacturing, in addition to loans and tax credits, to revitalize the American semiconductor industry after decades of production transferred to Asia. Using money from this law to acquire participation in Intel would not necessarily mean a greater government injection than expected, but a faster.
As with all the beneficiaries of the law, the Intel prize was designed as a refund, with the money of the subsidy divided into sections linked to specific projects of the project.
Intel had received 2.2 billion dollars from his subsidy until January. It is not clear if those 2.2 billion dollars would be included in the possible shareholding, if the company has received more disbursements since President Donald Trump assumed the position, nor in which schedule the money would receive the money under a possible share investment.
He gathered with Trump at the White House last week, helping to lay the foundations for the most recent conversations with Intel. The US president had previously criticized the Executive, asking for his dismissal for past ties with China. After the meeting, Trump praised the director of Intel, saying that he had “an incredible story.” According to people familiar with the matter, it is expected to remain in office despite Trump’s previous criticisms.
Intel’s future has baffled Trump officials since they assumed power. The pioneer company has lagged in front of the world leader Taiwan Semiconductor Manufacturing Co. in the production of tiny electronic components that drive from smartphones to artificial intelligence. Although TSMC and South Korean Samsung Electronics are expanding its operations in the US – with the support of the new law -, having an American company as Intel by manufacturing avant -garde chips in national territory has been a priority for both Trump and Biden administrations.
Biden officials, for example, tried to consider Intel as a manufacturing partner, and also explored remote ideas as a fusion between Intel and Globalfoundries.
Earlier this year, Trump’s team held preliminary conversations with TSMC about the possibility of operating Intel factories, an idea that TSMC has retired. Trump officials also internally proposed the possibility of looking for an investment in Intel by the United Arab Emirates. It is not clear if any of those proposals has gone from being a simple theoretical exercise.
If the Trump administration continues with a participation in the capital of Intel, that would fit into a recent pattern in which Washington has assumed a more aggressive role in strategic sectors. Trump’s team reached an agreement to receive 15% of certain semiconductor sales to China and took a golden participation (“Golden Share”) in United States Steel Corp. as part of the agreement to approve its sale to a Japanese company.
The idea with Intel also reminds the unprecedented announcement of the Department of Defense last that it will take a preferential participation of 400 million dollars in MP Materials Corp., a little known producer of rare earths in the US. That agreement would make the Pentagon the largest shareholder of the company, with a participation of approximately 15%.
