Intel received $5.7 billion from the U.S. government in exchange for a stake in the company
By ForGeeks
Financial Director Intel David Zinsner confirmed that the company has already received $5.7 billion from the US administration. As part of the deal, the government gets about 10% stake in the processor maker, CNBC reported.
Why Intel needed support
The agreement was a continuation of the CHIPS Act program, under which Intel previously received $8.9 billion in grants. Those funds were converted into an equity stake in the company.
Under the terms of the agreement, if Intel sells more than 49% of its chip production to outside investors, the government can buy back another 5% of the shares at $20 apiece. In this way, the government seeks to prevent the sale or division of the business.
An agreement that would allow Intel to buy back an additional 5% of its chip production.
“I don’t think there’s a high probability of our stake dropping below 50%, so eventually [the option] might just expire. The government was in agreement with that: they didn’t want us to sell the business.”
Intel’s difficulties
In recent years, the company has lost its leadership in a number of areas – its position in high-performance processors has fallen to AMD, while rivals TSMC and Samsung have gained ground in semiconductors.
The chip factory remains unprofitable, with losses reaching $13 billion in 2024. Amid pressure from shareholders, Intel has considered selling the fabs or even abandoning development of the 14A process if it can’t find customers.
Intel has been considering selling the fabs or even abandoning development of the 14A process if it can’t find customers.
Government interest and new investment
The government deal reflects a growing U.S. strategy to nationalize key technologies. Chips are seen as a critical resource for the development of AI and military industry.
Private investors have also shown interest in Intel. Japan’s SoftBank has already invested $2 billion in the company, abandoning the idea of buying out the fab division.
- planned $1 billion sale of shares in subsidiary MobileEye,
- sold a stake in chipmaker Altera
