The Trump administration is reportedly in discussions to convert some or all of Intel’s Chips Act grants into equity, potentially taking a 10% stake in the company. This move, which could amount to around $10 billion, is being explored as a way to support the struggling chipmaker, according to sources familiar with the matter, including a White House official.
Intel’s stock dropped 3.8% on Monday, following a brief rally driven by optimism about potential federal support. The company is slated to receive $10.9 billion in Chips Act grants, which are intended for both commercial and military production. This amount could be sufficient to cover the cost of the government’s proposed equity stake.
Federal Support for Intel Could Boost Struggling Business
The U.S. government’s interest in purchasing a stake in Intel follows media reports last week detailing a meeting between Intel CEO Lip-Bu Tan and President Donald Trump. This meeting was reportedly triggered by Trump’s demand for the resignation of Intel’s new CEO, citing concerns over the executive’s connections to Chinese firms.
Federal backing could provide Intel with the necessary resources to revive its underperforming foundry business, although analysts caution that the company still faces challenges such as a weak product roadmap and difficulties in attracting customers for its new factories.
Trump, known for his unorthodox approach to corporate involvement, has pushed for multibillion-dollar deals in the semiconductor and rare earth sectors, including arrangements with companies like Nvidia and MP Materials. Intel’s prior success in securing nearly $8 billion in Chips Act subsidies to build new factories in Ohio was a cornerstone of former CEO Pat Gelsinger’s strategy to regain the company’s manufacturing edge. However, under Tan’s leadership, some of those expansion plans have been scaled back, as the company shifts focus to building factories based on actual demand—potentially conflicting with Trump’s broader vision to bolster American manufacturing.
