US Government Considers Taking Stake in Intel to Fund Chip Manufacturing Complex

Intel shares surged 11% after hours, adding $10 billion to its market value, following reports that the US government is considering taking a stake in the chipmaker. The move could help fund Intel's delayed chip manufacturing complex in Ohio. Intel declined to comment but reiterated its support for US technology and manufacturing initiatives.

Intel Corporation's (NASDAQ: INTC) shares experienced a significant surge of 11% after hours on July 2, 2025, adding approximately $10 billion to its market value. The dramatic increase was fueled by reports that the U.S. government is considering taking a direct equity stake in the struggling chipmaker. The potential move aims to support Intel's delayed chip manufacturing complex in Ohio.

The news comes amidst a broader trend of government intervention in the semiconductor industry. According to a report by Bloomberg [1], the Trump administration is in talks with Intel about a potential equity stake, which would support the company's plans to build a manufacturing hub in Ohio. The size of the potential stake and the price are still being discussed.

Intel declined to comment on the discussions but reiterated its support for U.S. technology and manufacturing initiatives. The company's spokesperson stated that Intel is "deeply committed to supporting President Trump's efforts to strengthen US technology and manufacturing leadership" [1].

The reported move would be a "lifeline" for Intel, offering the company funding and government support. Tech analyst David Nicholson from The Futurum Group described the deal as a "game-changer" that could accelerate Intel's plans to regain its leadership in chip manufacturing and bolster domestic production capabilities [1].

Intel's planned Ohio factory, which is reported to be a key part of talks with Washington, had been touted as a key part of the company's future. The firm had a goal to make the factory the world's largest chip manufacturing facility, but its development has since faced numerous delays.

The deal would signal a deeper "intertwining" of the government and private businesses in the U.S., following a trend seen elsewhere in places like China. This week, chip giants Nvidia and AMD agreed to pay the U.S. government 15% of Chinese revenues, in another instance of the Trump administration's direct intervention in private enterprise [1].

The stock market's reaction to the news was overwhelmingly positive. Intel's shares surged over 7% during regular trading, with an additional 2.6% to 3.2% in after-hours trading [2]. This demonstrated strong investor optimism for potential government backing, which is viewed as a source of financial stability and strategic advantages for Intel's foundry ambitions.

The prospect of direct government backing is seen as a game-changer, offering financial stability and strategic advantages that could accelerate Intel's ambitious plans to regain its leadership in chip manufacturing and bolster domestic production capabilities. U.S. Government Eyes Stake in Intel Amid Strategic Shift The significant rally in Intel's stock on July 2 was directly triggered by reports, primarily from Bloomberg News, indicating that the Trump administration was in active discussions to acquire an equity stake in the company [2].

The timeline leading up to this moment reveals a fascinating political pivot. Just days before the stock surge, President Donald Trump had publicly demanded the resignation of Intel CEO Lip-Bu Tan, labeling him "highly CONFLICTED" over alleged investments in Chinese technology companies [2]. However, a pivotal White House meeting on Monday, August 11, between President Trump and CEO Tan dramatically reversed this stance. Following the "very interesting" discussion, Trump praised Tan's "amazing story" and success, shifting the narrative from confrontation to collaboration [2].

Intel's statement described the discussion as "candid and constructive," focusing on strengthening U.S. technology and manufacturing leadership. This meeting appeared to pave the way for the subsequent reports of potential government investment [2].

Key players and stakeholders involved in this unfolding drama include Intel Corporation (NASDAQ: INTC) itself, with CEO Lip-Bu Tan at the helm, tasked with steering the company through its challenges. The U.S. Government, particularly the Trump Administration, is the driving force behind the potential equity stake, aiming to boost domestic manufacturing and secure critical technology infrastructure [2].

The potential U.S. government stake in Intel, alongside existing significant CHIPS Act funding, is poised to reshape the semiconductor industry, creating clear winners and relative losers among key players. Intel (NASDAQ: INTC) stands as the unequivocal primary beneficiary. The U.S. government views Intel as a critical asset for national security and the broader effort to regain leadership in semiconductor manufacturing [2].

The overarching goal of government intervention is to revitalize U.S. chipmaking capacity, which has declined over decades. Intel's planned investments, supported by federal funds, are expected to create tens of thousands of jobs, including 10,000 new permanent jobs at Intel and nearly 20,000 construction jobs [2]. This will strengthen U.S. supply chains, foster domestic research and development (R&D), and ensure American leadership in cutting-edge semiconductor manufacturing.

Conversely, NVIDIA (NASDAQ: NVDA) and Advanced Micro Devices (NASDAQ: AMD) could be relative "losers" in terms of direct government financial support for domestic manufacturing compared to Intel [2]. Both companies have reportedly agreed to an "unusual revenue-sharing deal" with the U.S. government, paying 15% of their revenue from advanced AI chip sales to China in exchange for export licenses [2].

This "political tariff" directly pressures their profit margins and introduces earnings uncertainty, creating a less favorable financial arrangement than Intel's direct grants and tax credits. This precedent could also lead to further government intervention in their international business operations [2].

International chip producers, while some like Taiwan Semiconductor Manufacturing Company (NYSE: TSM) and Samsung (KRX: 005930) are also receiving CHIPS Act funding for U.S. facilities, may find themselves relatively disadvantaged. The primary emphasis of the U.S. government's direct stake and substantial funding is on a U.S.-headquartered company like Intel [2].

The U.S. push for domestic production aims to reduce dependency on foreign suppliers, potentially shifting market share and investment away from international manufacturing.

References:

[1] https://www.bbc.com/news/articles/cpv01pl208lo

[2] https://markets.financialcontent.com/wral/article/marketminute-2025-8-14-intel-shares-soar-over-7-on-reports-of-potential-us-government-stake