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Trump says Intel has agreed to a deal for US to take 10% equity stake

Daniel Nenni

Daniel Nenni

Admin
Staff member
Trump Intel Foundry Hat Smiling SemiWiki.jpg


(Reuters) -President Donald Trump said on Friday the U.S. would take a 10% stake in Intel under a deal with the struggling chipmaker and is planning more such moves, the latest extraordinary intervention by the White House in corporate America.

An official announcement on the arrangement is expected later in the day, a source familiar with the matter said.

The development follows a meeting between CEO Lip-Bu Tan and Trump earlier this month that was sparked by Trump's demand for the Intel chief's resignation over his ties to Chinese firms.

"He walked in wanting to keep his job and he ended up giving us $10 billion for the United States," Trump said on Friday.

Intel, whose shares rose more than 6%, declined to comment.

The move follows a $2 billion capital injection from SoftBank Group in what was a major vote of confidence for the troubled U.S. chipmaker in the middle of a turnaround.

Federal backing could give Intel more breathing room to revive its loss-making foundry business, analysts said, but it still suffers from a weak product roadmap and challenges in attracting customers to its new factories.

Trump, who met with Intel CEO Lip-Bu Tan on August 11, has taken an unprecedented approach to national security.

The U.S. president has pushed for multibillion-dollar government tie-ups in semiconductors and rare earths, such as a pay-for-play deal with Nvidia and an arrangement with rare-earth producer MP Materials, to secure critical minerals.

Tan, who took the top job at Intel in March, has been tasked to turn around the American chipmaking icon, which recorded an annual loss of $18.8 billion in 2024 — its first such loss since 1986. The company's last fiscal year of positive adjusted free cash flow was 2021.


(Reporting by Aditya Soni in Bengaluru, additional reporting by Juby Babu in Mexico City; Editing by Alan Barona and Maju Samuel)

Four people contributed to this article? :ROFLMAO: Or they could have used one AI agent.
 
Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.
 
tedc said:
Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.
Click to expand...

Will the USG be considered an institutional share holder? It is a non-voting stake. If so, yes, The USG will be the largest institutional share holder. Blackrock and Vanguard will be a close 2nd and 3rd. Is Micron Next? Gotta have memory for AI.

1755895319479.png
 
tedc said:
Believe this makes the US government Intel's single largest shareholder?

This will be very interesting. At least investment for MP Materials is to support a contender on the global stage. For Intel, it's putting a thumb on the scale of an industry with many existing US-based competitors. (Commerce Secretary Lutnick also mentioned any stake would be non-voting.)

Obviously the overwhelming focus is foundry... wonder if anything will change on the Product front? What milestones need to be hit before the US government exits their investment, or is this the first step to nationalization? Will be exciting to watch.
Click to expand...

It's a sad development, and having or not having voting rights won’t change the facts. Intel's situation is already complicated, and trying to please a 10% government shareholder, along with the politicians and politics involved, makes it even more so. Many of these challenges fall into the category of conflicts of interest. In the fast moving semiconductor industry, that only makes Intel's problems even harder to solve.
 
hist78 said:
It's a sad development, and having or not having voting rights won’t change the facts. Intel's situation is already complicated, and trying to please a 10% government shareholder, along with the politicians and politics involved, makes it even more so. Many of these challenges fall into the category of conflicts of interest. In the fast moving semiconductor industry, that only makes Intel's problems even harder to solve.
Click to expand...

What choice do they have? I have faith in Lip-Bu as financing is certainly in his area of expertise. Same with Masayoshi San of Softbank. Intel has its back to a wall and that means Lib-Bu will have to do some very clever things so Intel can innovate their way back in business. Not everybody will agree of course but I'm not hearing other get well plans so lets trust Lip-Bu. And yes I trusted Pat Gelsinger but that was short lived and I did not know him prior to becoming Intel CEO. Let's give Lip-Bu more time, it has only been 5 months and big changes have already been made.

“Most companies don’t die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is standing still.” Andy Grove’s Only the Paranoid Survive, first published in 1996.
 
sonchoy said:
Here's Trump's tweet. From "Conflicted and Fire him" to "Highly Respected" in less than 2 weeks. "Even more incredible future" means Ohio better be built and filled with 14A.

View attachment 3548
Click to expand...
"The United States paid nothing for these Shares"...

That makes no sense... and it directly contradicts the Reuters article: "The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program."
 
sonchoy said:
Here's Trump's tweet. From "Conflicted and Fire him" to "Highly Respected" in less than 2 weeks. "Even more incredible future" means Ohio better be built and filled with 14A.

View attachment 3548
Click to expand...
The US government is now a large investor in China and Vietnam.... hilarious. Hopefully those countries do not have a "cant do business with company associated with the CCP ... USA"

Intel wasnt going to get the rest of the grants since they are stopping factory building ..... so this is a pretty good deal for both.

I dont like government owned businesses but Intel is well suited to be a government company .... Intel is the Amtrack of semiconductor companies.

Somehow the US managed to lose money on the GM deal (quite shocking). This will probably make the US 10-20B in 2-3 years (especially after foundry is sold off and USG gets to buy more 5% more shares at 20)
 
tedc said:
"The United States paid nothing for these Shares"...

That makes no sense... and it directly contradicts the Reuters article: "The government will purchase the 433.3 million shares with funding from the $5.7 billion in unpaid CHIPS Act grants and $3.2 billion awarded to Intel for the Secure Enclave program."
Click to expand...
They took all the grants which were already committed and converted them. Accounting fun on both sides
 
Daniel Nenni said:
What choice do they have?
Click to expand...

They do have options. But just as in the past 20+ years, those options are dismissed one by one, primarily because Intel insists on staying as an IDM.

Pat Gelsinger became Intel’s CEO on February 15, 2021, and was 'retired' on December 1, 2024. How many opportunities, time, and money were wasted between his hiring and departure in order to keep Intel as an IDM? The same excuses and repeated illusions are pushing Intel toward a point beyond recovery.

As I’ve said several times here on SemiWiki, Intel’s customers and competitors won’t wait. They’re moving forward at an accelerated pace, with or without Intel.
 
At one level this all makes sense. I've been saying for a long time that if the US is putting up serious investment in Intel, it ought to be able to see some potential return for that.

On the other hand, the sort of thinking that goes into announcements like these is beyond me !

"The development follows a meeting between CEO Lip-Bu Tan and Trump earlier this month that was sparked by Trump's demand for the Intel chief's resignation over his ties to Chinese firms."

"He walked in wanting to keep his job and he ended up giving us $10 billion for the United States," Trump said on Friday.

What does this actually mean ? Presumably either Trump made up the whole LBT-China stuff in order to extort Intel for the $10bn ... or he still believes the LBT-China stuff to be true, but thinks it matters less than the $10bn he's claiming to have extracted ...

It is at least consistent with his approach to nVidia and AMD GPU exports to China. I'll give him that.

Is Trump about to become Intel's activist shareholder from hell ?
 
Daniel Nenni said:
View attachment 3550
Click to expand...
tooLongInEDA said:
At one level this all makes sense. I've been saying for a long time that if the US is putting up serious investment in Intel, it ought to be able to see some potential return for that.

On the other hand, the sort of thinking that goes into announcements like these is beyond me !

"The development follows a meeting between CEO Lip-Bu Tan and Trump earlier this month that was sparked by Trump's demand for the Intel chief's resignation over his ties to Chinese firms."

"He walked in wanting to keep his job and he ended up giving us $10 billion for the United States," Trump said on Friday.

What does this actually mean ? Presumably either Trump made up the whole LBT-China stuff in order to extort Intel for the $10bn ... or he still believes the LBT-China stuff to be true, but thinks it matters less than the $10bn he's claiming to have extracted ...

It is at least consistent with his approach to nVidia and AMD GPU exports to China. I'll give him that.

Is Trump about to become Intel's activist shareholder from hell ?
Click to expand...

Sorry, I’m a party pooper.

When an experienced and accomplished venture capitalist turned billionaire, and now Intel CEO, has to lavish so many compliments on two politicians without even acknowledging the American taxpayers who actually footed the bills, I can’t help but wonder if Mr. Li-Pu Tan is already plotting his own exit strategy.

BTW, continuing the Ohio project will bleed Intel’s already limited CapEx. From a business standpoint, it makes no sense. But for political reasons, Intel is being forced to march straight into a risky and dangerous trap.
 
Reports that US is considering taking stakes in Samsung and TSMC prompt swift responses

Reports that the US government is also considering taking equity stakes in other chip makers, after it confirmed it is in talks with Intel to get a 10 percent stake in the company in exchange of the subsidies it received in CHIPS Act, have rattled the market and prompted responses from stakeholders, according to media reports.

Earlier in the week, Reuters reported that US Commerce Secretary Howard Lutnick is exploring the idea of the federal government taking equity stakes in computer chip manufacturers that receive CHIPS Act funding, to support factory construction in the US, which include TSMC and Samsung, citing two sources.

In response, executives at TSMC have held preliminary discussions about handing back their US government subsidies if the Trump administration insists on becoming a shareholder, the Wall Street Journal reported on Friday, citing people familiar with the matter.

However, the Wall Street Journal reported that there are no plans to seek shares in larger semiconductor firms that are expanding their investments in the US, citing an unnamed government official.

This development was followed by news from South Korea on Thursday. According to the Korea JoongAng Daily, the South Korean presidential office denied speculation that the US government would take equity stakes in South Korean companies that receive CHIPS Act funding, such as Samsung, dismissing the reports as "rumors."

A presidential spokesperson said no South Korean companies have received such subsidies yet so the idea of converting subsidies into equity does not apply to them, according to the report.

Chinese experts warned that as the US government drastically escalates its intervention in the market, breaking away from century-old tradition of free market, more companies worldwide could be drawn in. The move could tarnish its image as a market economy and erode confidence of global investors.

Ma Jihua, a veteran telecom industry analyst, said the US government pays little heed to market norms by coercing and forcing major chipmakers to move their production facilities to the country and seeking direct control of the operation of these companies as "it seems that only by having all the foundries on US soil that the administration will feel secure."

As for TSMC, if the company were to move all its advanced production facilities to the US, the company could face the existential threat of being hollowed out, Ma warned.

The US administration's interventions in the private sector have caused worries among corporate executives, according to the Wall Street Journal report.

However, the expert said the moves by the US administration will not succeed in truly bringing chip manufacturing back to the US, as the supply chain is highly complex and the US lacks sufficient talent reserves and supporting ecosystems, with costs significantly higher than those in Asia.

More likely, these moves will only alarm companies about the US' worsening business environment, with the administration growing bolder in trespassing market rules and legal boundaries, Ma said.

Zhou Mi, a senior research fellow at the Chinese Academy of International Trade and Economic Cooperation, told the Global Times on Friday that while the original intention of the US CHIPS Act was to use government subsidies to entice companies to increase their investment in the US, the current US government's practice of exchanging shares for subsidies has been an overreach.

"This will alert companies and dampen their enthusiasm for investment in the US. In the long run, it will damage the US' self-proclaimed image as a market economy and hinder its competitiveness in attracting global funds," Zhou said.

https://www.globaltimes.cn/page/202508/1341489.shtml

Was waiting for this 🤣🤣🤣🤣

Global Times
 
hist78 said:
They do have options. But just as in the past 20+ years, those options are dismissed one by one, primarily because Intel insists on staying as an IDM.

Pat Gelsinger became Intel’s CEO on February 15, 2021, and was 'retired' on December 1, 2024. How many opportunities, time, and money were wasted between his hiring and departure in order to keep Intel as an IDM? The same excuses and repeated illusions are pushing Intel toward a point beyond recovery.

As I’ve said several times here on SemiWiki, Intel’s customers and competitors won’t wait. They’re moving forward at an accelerated pace, with or without Intel.
Click to expand...

Understood.

In my opinion the world needs alternatives for semiconductor manufacturing. For Intel Foundry to be competitive they need customer collaboration, as Apple provided TSMC for their FinFET generation of processes. So how does Intel get there?

A competent CEO is a good start. Intel has not had one since Andy Grove in my opinion but I think everyone can agree that BK and PatG were not. Hopefully we can also agree that Lip-Bu Tan is a competent CEO just given the last 5 months at Intel.

Proper financial backing. Lip-Bu seems to be doing a good job there. He certainly has plenty of experience in that space.

What is next?
 
Barnsley said:
Reports that US is considering taking stakes in Samsung and TSMC prompt swift responses


Was waiting for this 🤣🤣🤣🤣

Global Times
Click to expand...

I was as well. All companies who received CHIPs Act money beware! :eek:

From NIST:
  • Intel — up to $7.865B for projects in AZ, NM, OH, OR.
  • TSMC Arizona — up to $6.6B for three leading-edge fabs in Phoenix, AZ.
  • Micron Technology — up to $6.165B for new memory fabs in ID & NY (plus a PMT for VA).
  • Samsung Electronics — up to $4.745B for expansion in TX.
  • Texas Instruments — up to $1.61B for new 300mm fabs in TX & UT.
  • GlobalFoundries — up to $1.5B overall (NY) and $125M (VT) for expansion/modernization.
  • GlobalWafers (GWA & MEMC) — up to $406M total for wafer plants in TX & MO (NIST site shows $380M TX and $20M MO).
  • SK hynix — up to $458M for advanced packaging/HBM facility in IN.
  • Amkor Technology — up to $407M for advanced packaging in Peoria, AZ.
  • Hemlock Semiconductor — up to $325M for semiconductor-grade polysilicon in MI.
  • Polar Semiconductor — $123M to expand mature-node capacity in MN.
  • HP (HPI Federal LLC) — up to $53M for Corvallis, OR microfluidics fab.
  • Corning — up to $32M to expand glass components in NY.
  • Edwards Vacuum — up to $18M for dry vacuum pump manufacturing in NY.
  • Infinera — up to $93M for InP photonics fab & advanced packaging (CA & PA).
  • BAE Systems (Electronic Systems) — up to $35.5M for NH defense-critical chips.
  • Rocket Lab (SolAero) — up to $23.9M for space-grade solar cell production in NM.
  • Absolics — $100M (NAPMP advanced-packaging R&D) in GA.
  • Applied Materials — $100M (NAPMP) for next-gen packaging substrates in CA.
 
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