US government considers buying a stake in Intel after Trump meets with the CEO
US considers buying Intel stake post-Trump meeting, boosting Intel's plans.
Recent reports from sources such as Bloomberg suggest that the US government is contemplating acquiring a stake in Intel. This consideration follows a significant meeting between Intel CEO Lip Bu Tan and President Donald Trump. The details about the size of this potential stake are still not clear, but the investment is anticipated to facilitate the construction of Intel's planned fabrication plant in Ohio, which is crucial for the company's competitive edge in the semiconductor market against giants like TSMC and Samsung. Despite both parties declining to comment, Intel has clearly reiterated its intent to contribute to Trump’s domestic manufacturing agenda.
The move would represent a reversal for President Trump, who had previously called for CEO Lip Bu Tan’s resignation due to concerns about his past investments in Chinese companies. Following the meeting between Trump and Tan, the President shifted his stance and indicated plans to consult with cabinet members about ways to cooperate strategically with Intel. This signaling from the White House led to a notable spike in Intel’s shares, which increased by almost 9%.
Intel has faced considerable challenges in recent years, losing significant CPU market share to AMD, canceling high-performance GPU projects, and trailing behind in advanced chip manufacturing compared to TSMC and Samsung. The company hopes to turn its fortunes with advancements in their 18A and 14A process nodes designed to rival TSMC's 2nm technology. Intel's ambitions, however, face hurdles such as low yield rates for the 18A node. CEO Lip Bu Tan has made it clear that he is ready to cancel these nodes if they fail to attract external business partners.
The Biden administration, even before President Trump’s recent involvement, had discussed supporting Intel to stabilize the company’s financial health. Intel's reliance on potential funding from the CHIPS Act, along with previous discussions of possible government intervention, illustrate a broader trend of efforts to sustain the vital tech manufacturer. Previous actions taken under both Trump and Biden show bipartisan recognition of the strategic importance of maintaining a domestic semiconductor industry.
The implications of government intervention in Intel extend beyond mere financial support; they signify the lengths to which the administration may go to preserve tech leadership amid global competition. Investments or interventions in Intel, as the sole advanced US semiconductor manufacturer, highlight a strategic emphasis on maintaining US prominence in the semiconductor industry, which is crucial for technological innovation and national security. The potential government stake would not just support Intel's infrastructure and technological development but also reaffirm the geopolitical significance of US technological self-reliance.
Sources: Bloomberg, TechSpot