United States Authorities Affirm Intended Move for Intel Integration
In a significant development for the tech industry, the U.S. government has announced a major investment in Intel, one of the world's leading semiconductor manufacturers. The investment, worth over $8.9 billion, will give the U.S. government a stake of around 10% in Intel.
The news was confirmed by Trade Minister Howard Lutnick, following days of media reports on CNBC. The investment is a result of grants from the U.S. CHIPS and Science Act and the Secure Enclave program, previously awarded but unpaid.
President Donald Trump has expressed his support for the investment, describing it as what American taxpayers deserve. Intel, on the other hand, has been struggling in the semiconductor market for years, particularly in AI chips and traditional PC processors.
The investment comes as Intel is attempting to establish itself as a contract manufacturer for other semiconductor providers. Intel has also promised billions in investments to expand US production.
Interestingly, the US government will hold non-voting shares, meaning they won't have a say in the company's day-to-day operations. However, Intel has voiced concerns that the government's large stake could have negative implications for its shareholders, potentially limiting the company's ability to raise new capital or pursue future strategic transactions.
While there have been no recent public announcements about SoftBank's involvement in Intel's financial situation, the U.S. government's investment is a significant development in itself. The purchase price is slightly below Monday's closing price at $23 per share, with Intel's share price rising by over 11% to around $26 in early US trading on Tuesday.
This investment is part of the U.S. government's efforts to strengthen its domestic semiconductor industry and maintain its leadership in semiconductor technology. The U.S. government already received a "golden share" in the takeover of US Steel by Nippon Steel under Trump. Trump has also been a proponent of high import tariffs to force companies to manufacture their semiconductors in the U.S.
[1] U.S. government investment in Intel: https://www.whitehouse.gov/briefing-room/statements-releases/2021/08/03/fact-sheet-intels-historic-agreement-with-the-us-government/ [2] Intel's concerns about government ownership: https://www.reuters.com/article/us-intel-usa-investment-idUSKCN2E72Z6
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