Trump says US government will take 10% stake in Intel – News

U.S. President Donald Trump today announced that the federal government will receive Intel Corp. shares in exchange for the CHIPS Act financing the company won last year.

Trump detailed the deal, which confirms recent media reports, during a White House press briefing. He told attendees the U.S. government will take a 10% stake in Intel.

In a statement released a few hours after the briefing, the chipmaker detailed that the government will receive 433.3 million shares of common stock for $20.47 apiece. That’s a slight discount to today’s closing price. Intel stated that the stake won’t come with a board seat. Additionally, the U.S. government has agreed to vote with the company’s board on matters requiring shareholder approval “with limited exceptions.”

The agreement includes a warrant that gives the White House the option to buy another 5% of Intel’s common shares in the next five years. According to the company, the warrant can only be exercised if it “ceases to own at least 51% of the foundry business.” Earlier this year, rumors emerged that Taiwan Semiconductor Manufacturing Co. had floated the idea of taking an up to 50% stake in Intel’s foundry unit. 

“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” Intel Chief Executive Officer Lip-Bu Tan said in a statement today. 

A few years ago, Intel launched a multibillion-dollar initiative to expand its U.S. manufacturing infrastructure. The plan is set to see the company build several new fabs in Arizona and Ohio. The company also intends to revamp a number of existing chip plants by upgrading them to new manufacturing processes, expanding their production capacity or both.

Last November, the Biden administration provided Intel with $7.86 billion worth of federal grants to support the manufacturing push. A few months earlier, the company won $3 billion in federal financing as part of a separate initiative called Secure Enclave. The latter program is set to see Intel produce chips for the U.S. defense sector.

The stake that Intel has agreed to give the U.S. government will be provided in exchange for the grants it won in 2024. Earlier this week, Bloomberg reported that the White House isn’t expected to increase the amount of federal financing available to the chipmaker. However, it’s believed that the government may accelerate the disbursement of the grants issued last year.

Trump remarked during today’s press briefing that “we do a lot of deals like that. I’ll do more of them.” That suggests the White House may seek stakes in additional chipmakers. Rumors of such a plan first emerged on Wednesday, when Reuters reported that the administration would focus on CHIPS Act funding recipients.

TSMC, Samsung Electronics Co. and Micron Inc. are among the companies that have received federal grants under the legislation. Sources told the Wall Street Journal today that the White House has no plans to take stakes in TSMC and Micron because they’re actively upgrading their U.S. manufacturing infrastructure.

Photo: Intel