U.S. Government Seeks 10% Stake in Intel to Boost Semiconductor Industry

The U.S. government is in discussions with Intel Corporation to acquire a 10% stake in the company. This move comes as part of a broader strategy to bolster the U.S.'s position in the advanced semiconductor industry. The U.S. President has indicated that the government should obtain this stake, which would make it the largest shareholder in Intel. The company's market value is currently just over 100 billion dollars.

During a press conference at the White House, the President stated that Intel has agreed to this proposal, describing it as a great deal for the company. However, a White House official clarified that discussions with Intel are ongoing and that no final decisions have been made. The official also noted that Intel's CEO has not yet explicitly agreed to the terms of the deal. The President and the CEO are scheduled to meet later in the day to further discuss the matter.

Intel, the only U.S. company capable of manufacturing the most advanced chips domestically, has been a significant player in the semiconductor industry. The company produces chips for major tech firms, including Apple, NVIDIA, Qualcomm, AMD, and itself. Intel has been investing heavily in building a series of chip factories in Ohio, aiming to produce the most advanced chips, including those for artificial intelligence, by 2030. However, the company recently announced that it would slow down the construction of these factories due to market conditions.

This potential deal marks a significant shift in U.S. industrial policy, with the government taking a more active role in the private sector. The Commerce Secretary has stated that the government seeks to acquire equity in Intel in exchange for funds provided by the CHIPS and Science Act. The Secretary emphasized that the government's stake would be non-voting, ensuring that it does not interfere with Intel's operations.

Earlier this week, Intel announced another major supporter: SoftBank, which plans to invest 2 billion dollars in the chip manufacturer, equivalent to about 2% of its shares. This investment comes as Intel seeks to strengthen its position in the competitive semiconductor market, where it lags behind industry leaders like Taiwan Semiconductor Manufacturing Company.

The proposed transaction has sparked debate about the government's role in private business operations. Critics argue that such interventions could introduce new risks and potentially lead to misguided investments. However, supporters of the deal believe it could enhance the U.S.'s competitive edge in the semiconductor industry, which is vital for national security and technological advancement.

Intel, founded in 1968, has been transitioning into a data-centric company, focusing on innovation in areas such as artificial intelligence, 5G, and autonomous vehicles. The potential sale of a 10% stake to the U.S. government could provide Intel with additional resources to accelerate this transformation and invest in new technologies.

The U.S. government's efforts to support the domestic semiconductor industry include the CHIPS Act, which provides financial incentives for companies investing in semiconductor manufacturing and research. The potential sale of a 10% stake in Intel to the U.S. government is seen as a significant step in this direction, as it could provide Intel with the resources needed to expand its manufacturing capabilities and invest in new technologies.