The Trump administration is reportedly in talks with Intel to have the US government take a stake in the troubled company, initially to help fund factories Intel is building in Ohio.
Intel would not comment on the report, first carried in Bloomberg. “We are not going to comment on rumors or speculation,” a spokesperson said. After the report appeared, Intel shares rose 7%.
Intel CEO Lip-Bu Tan met with President Trump in the White House on Monday after Trump had called for Tan’s resignation stemming from allegations he has ties with China. At that point, Intel said Tan is “deeply committed to advancing US national and economic security interests.”
The report of a US investment in the fab business comes as some on the Intel board hope to spin off the fab business, which has not secured a major customer. Meanwhile, the company has laid off thousands of workers and begun other cost-cutting measures since Tan’s arrival as CEO in March. In July, Tan announced a slow down of fab development in Ohio and canceling of plans for fab sites in Germany and Poland.
President Trump has shown a willingness to deal with chipmakers, and recently said the US government would take 15% of some advanced chip sales by Nvidia and AMD to China. That deal brought a strong rebuke from six US Senators who sent to letter to President Trump urging he reverse the decision. They said the deal "runs counter to US national security interests ."
The Pentagon has also bought a $400 million stake in rare-earth miner MP Materials and has a golden share in US Steel as part of a deal to allow Nippon Steel to buy the US industrial company.
The idea of the US government funding Intel received some mixed reviews by analysts. “Intel could use the extra funding for sure, but not if the government controls anything in the company,” said Jack Gold, an analyst at J. Gold Associates. “They know nothing about a semiconductor company and I’d be very concerned if the Trump administration started putting appointees on the Intel board and in executive positions at Intel.”
Gold was not as concerned, however, if the government could somehow influence or financially incentivize fabless semiconductor companies like Nvidia or Qualcomm to move some of their chip production to Intel and away from TSMC. Such a move could be accomplished with tariff exemtions, he noted.
However, Gold said so far, “everything is pure speculation.”
The US has already authorized $8 billion in CHIPS Act grants to Intel, with more than $2 billion of that total paid to Intel. Patrick Moorhead, founder of Moor Insights & Strategy, has been a backer of government investments in Intel and noted that the Taiwanese government has $96 billion invested in TSMC.