FT citing CFO: Trump-Intel deal designed to block sale of chipmaking unit

FT citing CFO: Trump-Intel deal designed to block sale of chipmaking unit

Intel (INTC.O) received $5.7 billion in cash as part of a deal negotiated by U.S. President Donald Trump for a 10% stake in the struggling chipmaker, according to Intel's finance chief David Zinsner [1]. The deal is designed to incentivize Intel to retain control of its contract manufacturing business, or foundry, which is a key area of concern for the company.

The deal includes an additional 5% warrant, which would vest if Intel's ownership in the foundry drops below 51%. Zinsner expressed confidence that Intel would maintain a majority stake in the foundry, suggesting the warrant is likely to expire worthless [1].

Intel has been exploring options to separate its foundry from its design business and has created a separate management board to govern it. The company is considering strategic investors for the foundry unit but is not yet ready to take outside investment [1]. The future of Intel's foundry business depends on securing a major customer for its next-generation manufacturing process, known as 14A. Failure to do so could lead to Intel exiting the foundry business altogether [1].

Intel is focused on securing a big customer for its foundry next year while maintaining financial discipline. The company has also been considering cost-cutting measures, including a plan to reduce its workforce to 75,000 employees [2].

The deal between Intel and the U.S. government is still under discussion, with White House Press Secretary Karoline Leavitt stating that the details are being finalized by the Department of Commerce [2]. President Trump has hinted at forging more such deals, suggesting that the U.S. government may seek stakes in other companies receiving funds from the CHIPS Act [3].

Intel shares were up 0.2% at $24.90 on Thursday afternoon, reflecting the market's reaction to the deal and the company's ongoing efforts to turn around its business [2].

References:
[1] https://www.reuters.com/business/intel-has-received-57-billion-under-trump-investment-deal-cfo-says-2025-08-28/
[2] https://finance.yahoo.com/news/intel-cfo-says-chipmaker-received-163807430.html
[3] https://en.yna.co.kr/view/AEN20250823000400315