Trump Admin, SoftBank Eye Billions for Intel Revival
In a dramatic reversal of fortunes, Intel CEO Lip-Bu Tan, who just weeks ago faced calls for his removal from former President Donald Trump, now finds his company on the cusp of securing billions in fresh capital. While initial reports hinted at a broader coalition of support, including from SoftBank, the most concrete discussions revealed thus far center on a significant federal intervention.
Discussions are reportedly underway for the Trump administration to acquire approximately a 10% stake in the beleaguered US chip giant. This potential investment is not a direct cash infusion but rather a creative maneuver: converting existing grants awarded to Intel under the bipartisan US CHIPS and Science Act into equity. The CHIPS Act, enacted to revitalize domestic semiconductor manufacturing and reduce reliance on foreign supply chains, provides billions in subsidies and grants. The proposed conversion of these grants into an equity stake would be an unprecedented move, signaling a deeper level of government intervention and commitment to a strategically vital company.
Such a conversion could unlock an estimated $10 billion in capital, providing a crucial war chest for Tan as he endeavors to steer Intel away from its recent challenges and back to a position of market leadership. Once the unchallenged titan of the semiconductor industry, Intel has faced a challenging decade marked by manufacturing delays, intense competition from rivals like TSMC and AMD, and a gradual erosion of its market dominance. Its ambitious plans to reclaim technological leadership, including a significant investment in new foundries and process technologies, require immense capital, making this potential federal lifeline particularly timely.
The proposed federal stake marks a remarkable pivot for Trump, who less than two weeks prior had publicly advocated for Tan’s ouster. This sudden shift suggests a pragmatic recognition of Intel’s strategic importance to national security and economic competitiveness, particularly amidst global supply chain vulnerabilities and the ongoing technological rivalry with China. The unexpected alliance between the Trump administration and Intel’s current leadership highlights the escalating geopolitical importance of semiconductor production. With global powers vying for technological supremacy and supply chain resilience, ensuring the health and competitiveness of a foundational American chipmaker like Intel appears to transcend past political disagreements.
While the specifics of the equity conversion and the terms of the stake are still being negotiated, the prospect of substantial government backing offers a glimmer of hope for Intel’s revival. It underscores the critical role the US government is willing to play in safeguarding and bolstering its domestic semiconductor industry, even if it means forging unexpected alliances.