Intel Reportedly In Talks To Receive Potential $19.5 Billion Boost From The White House Amid Qualcomm Rumors

Intel is trying to save itself. In addition to the significant business adjustments announced in mid-September, the company has recently been rumored to be a potential acquisition target for Qualcomm.

However, most Wall Street analysts believe that Intel is still inclined to operate independently and is unlikely to accept Qualcomm's acquisition offer. The latest news indicates that the U.S. government is discussing providing Intel with a financial grant of $8.5 billion and a loan of $11 billion, which could provide a crucial capital boost for Intel.

According to informed sources, the White House may finalize this grant plan before the end of the year, with negotiations already in the later stages. Any acquisition of all or part of Intel's business could disrupt these delicate negotiations.

A person familiar with Intel also pointed out that, due to the proximity of the U.S. election, the White House may be eager to implement this project, and it would not be surprising if the subsidy were determined before the November election.

This would be the largest single subsidy granted under the U.S. chip act, with the U.S. government hoping to support local chip companies through a series of financial aids and attract overseas investors. This act is also one of the Biden administration's most proud political achievements.

In March of this year, Biden visited Intel's factory in Arizona, USA, and vigorously promoted this temporary financing agreement. The White House stated that the agreement would bring 3,000 manufacturing jobs and 7,000 construction jobs to Arizona, which is a key swing state in the election.

In addition, as the long-standing king of the U.S. chip industry, Intel also has a special representative significance for the United States. U.S. Commerce Secretary Gina Raimondo once referred to Intel as the champion semiconductor company. G Dan Hutcheson from TechInsights also pointed out that part of the purpose of the Chip Act is to ensure that companies like Intel are supported by the U.S. government.

In a gesture of goodwill to the U.S. government, Intel emphasized in its transformation statement in the middle of this month that it will not pause all investments in the United States, but will cancel its expansion in Germany, Poland, and Malaysia.

If Intel can successfully obtain this grant from the White House, it may be able to make another attempt in the chip foundry business, trying to turn a single bicycle into a motorcycle, instead of being forced to split or sell due to financial pressure.

Intel itself still has high hopes for its continuously loss-making chip foundry business. Earlier this month, Intel claimed that its most advanced 18A chip manufacturing plant has secured a major customer, Amazon. This week, Intel released two AI chips again. Although their performance is somewhat reduced compared to Nvidia's H100, they have a significant cost advantage.

This represents Intel's ambition to compete with the world's top foundries, and this ambition currently urgently needs funding to sustain it.