Intel is the only American company capable of producing the fastest chips domestically, although competitors like TSMC and Samsung have factories in the US. President Donald Trump has been advocating for increased domestic production of chips and high-tech products.
Bloomberg's sources indicated that selling a stake to the government would provide Intel with capital for its ongoing factory construction in Ohio. Intel stock closed up 7.4% after the news broke.
Earlier this week, Intel CEO Lip-Bu Tan met with Trump at the White House following the president's call for his resignation over alleged ties to China. At the time, Intel affirmed Tan's "commitment to strongly advancing US national security and economic interests".
An Intel representative declined to comment on the government's potential stake. "We look forward to continuing to partner with the Trump administration to advance these shared priorities, but won’t comment on rumors," the representative told CNBC.
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Outside Intel headquarters in California. Photo: Intel |
Outside Intel headquarters in California. Photo: Intel
Tan took the helm earlier this year after the chipmaker failed to capture significant market share in AI chips. Intel has also invested heavily in developing its foundry business – manufacturing chips for other companies. However, it has yet to secure major customers. This is crucial for scaling operations and building confidence among potential clients.
In July, Tan announced that Intel had canceled production plans in Germany and Poland and would slow down construction in Ohio. He explained that Intel's spending was under tight scrutiny.
Intel's stock has risen 19% since the start of the year. However, it plummeted 60% last year, a record low, due to ongoing challenges.
Under President Trump, the US government has become more involved in major industries. Last week, it announced it would receive 15% of Nvidia and AMD's revenue from selling certain chips to China. The Pentagon acquired a $400 million stake in rare earth miner MP Materials. The government also holds a "golden share" in US Steel, a provision of the company's sale to Japan's Nippon Steel.
Ha Thu (CNBC, Reuters)
