U.S. Government Eyes 10% Stake in Intel to Boost Domestic Manufacturing

The United States government is considering converting part or all of the funding from the "Chips and Science Act" into equity to acquire a 10% stake in Intel, a struggling semiconductor manufacturer. This move is seen as a strategic play to gain more control over the company's operations, particularly those related to China. The government's intervention is part of a broader effort to bolster domestic manufacturing and compete with China in critical industries.

Intel has been under significant pressure, with its stock price falling over 50% since the beginning of last year. The company is facing financial challenges, including rising costs and an outdated product line that is struggling to keep up with advancements in artificial intelligence. The government's support could provide Intel with much-needed breathing room to revive its struggling foundry business, but the company still faces significant hurdles, such as a weak product roadmap and difficulties in expanding its customer base for new factories.

Intel's financial woes have put its plans to build a chip manufacturing center in Ohio at risk, with construction delayed until after 2030. The company's new CEO, who took over in March, has been focused on stabilizing Intel's finances. However, analysts believe that this may conflict with the government's efforts to boost domestic manufacturing. The government's support for Intel is part of a broader strategy to strengthen the U.S. semiconductor industry and compete with China, which has been accused of unfair trade practices and intellectual property theft.

The government's intervention in Intel is not an isolated incident. Earlier this year, the U.S. Department of Defense announced plans to acquire a 4 billion dollar stake in MP Materials, a domestic rare earth producer, making the Pentagon the company's largest shareholder. This move is seen as a way to ensure a stable supply of critical minerals for the defense industry and reduce dependence on foreign suppliers. The government's support for Intel and MP Materials is part of a broader effort to strengthen the U.S. economy and compete with China in key industries.

The government's intervention in Intel and other companies is seen as a departure from traditional free-market principles, but it is also seen as a necessary step to ensure the country's economic and national security. The government's support for Intel and other companies is part of a broader effort to strengthen the U.S. economy and compete with China in key industries. The government's intervention in Intel and other companies is seen as a necessary step to ensure the country's economic and national security, but it is also seen as a departure from traditional free-market principles.