[News] Trump Administration Reportedly Mulling a Stake in Intel Amid U.S. Manufacturing Push

According to The Wall Street Journal, sources say Intel and the Trump administration are in talks over a potential deal that would see the U.S. government take a stake in the struggling chipmaker.

Trump reportedly discussed the idea with Intel in a Monday meeting at the White House, though details are still being finalized, the report notes, citing Bloomberg. The Wall Street Journal adds that the administration has been exploring ways to boost America’s share of semiconductor manufacturing and reportedly sees Intel as the domestic company best positioned to challenge TSMC.

Taking a stake in Intel could have different implications than offering subsidies. Citing Mira Ricardel, former undersecretary of commerce for industry and security in the first Trump administration, the Wall Street Journal notes that such a stake could give the U.S. government greater influence over—and visibility into—Intel’s operations, particularly regarding China, in ways that regulations or subsidies likely could not.

The government’s stake could help fund Intel’s factory projects in Ohio, CNBC reports, citing Bloomberg. Intel was slated to receive about $8 billion from the 2022 CHIPS and Science Act to build a plant in Ohio, but the project has been delayed for several years,  Wall Street Journal notes.

The Wall Street Journal also states that although it is uncommon, it is not without precedent for the government to take stakes in companies that are not in financial distress. Meanwhile, industry experts cited in the report caution that Intel may ultimately need government assistance if Tan and other executives are unable to revive the business.

How a Potential U.S. Stake in Intel Could Impact TSMC

Notably, regarding TSMC’s position if the U.S. government were to take a stake in Intel, institutional investors, cited by Economic Daily News, say that if the news is true, the likelihood of TSMC being forced to cooperate with Intel in foundry services would be greatly reduced, while the risk of technology leakage would also lessen—making the development still positive for TSMC.

However, Economic Daily News also cautioned that once the U.S. government becomes a shareholder, it will be crucial to monitor whether Washington requires other tech companies to place orders with U.S. fabs—a move that could weigh on TSMC.

Read more

• [News] Trump Demands CEO Lip-Bu Tan’s Ouster — Focus on U.S. Manufacturing Rift and Intel’s Future
• [News] Intel Rolls Out “USAI” Web Page Showcasing Commitment to U.S. Manufacturing

(Photo credit: Intel)