On Friday local time, U.S. Secretary of Commerce Gina Raimondo announced that the federal government has completed the acquisition of chip giant Intel’s equity acquisition, buying 10% of its shares. This move is seen as the Trump administration’s latest move to strengthen its control over companies in key U.S. industries, signaling a further tilt in U.S. industrial policy towards deep government involvement in the private sector.
According to a press release issued by Intel, the U.S. government purchased 433.3 million common shares at a price of $20.47 per share, with a total investment of about $8.9 billion, which corresponds to exactly 10% of the equity. Intel specifically pointed out that the purchase price was lower than the market price at the time of the transaction, providing a cost advantage for government investment.
From the perspective of funding sources, the $8.9 billion in this acquisition mainly comes from two major channels: $5.7 billion comes from grants approved but not yet allocated in the CHIPS and Science Act, and the remaining $3.2 billion comes from an independent government project dedicated to the development of security chips, which is highly consistent with Intel’s core business.
Regarding the deal, U.S. President Trump posted on the social platform Truth Social emphasizing: “The U.S. government acquired these shares at no additional cost, and the current market value of these shares is about $11 billion.” This is not only a great deal for the U.S. government, but also good for Intel. It is worth noting that Trump had revealed to reporters at the White House earlier that day that the government should get about 10% of Intel, “they have agreed, and I think it’s a very good deal for them,” releasing the trade signal in advance.
In addition to the equity acquisition, the U.S. government has also obtained an important right: if Intel is no longer the controlling shareholder of its foundry business in the future, the government has the right to purchase a further 5% stake in Intel, which reserves operational space for the government to intervene in the company’s operations in the future.
Intel CEO Pat Gelsinger reiterated the company’s “Made in America” positioning at a press conference: “As the only semiconductor company in the world that simultaneously conducts cutting-edge logic chip research and development and manufacturing in the United States, Intel has always been committed to ensuring that the world’s most advanced technology is produced in the United States, and this cooperation with the government will further strengthen this goal.” ”
It is reported that Trump will meet with Gelsinger at the White House on Friday afternoon, and Commerce Secretary Raimondo has also posted a photo with Gersinger on social media, and the two sides have interacted frequently, highlighting the importance of this cooperation. Raimondo also made a public statement this week, clarifying the government’s investment logic: “We deserve to receive equity returns for investing money. We will honor the subsidies previously promised by the Biden administration, but only on the premise of acquiring equity, which is an important principle of government participation in key industries. ”
At the same time as the U.S. government took a stake, Intel also received support from other capital. SoftBank announced this week that it would inject $2 billion into Intel, corresponding to a stake of about 2%, becoming another heavyweight investor in Intel and supplementing the company’s additional funds.
However, Intel is currently facing significant technology gap challenges. The industry generally believes that its technical level is far from TSMC – TSMC, as the global chip foundry leader, is not only the core supplier of technology giants such as Apple, Nvidia, Qualcomm, AMD, etc., but even Intel itself needs to purchase some chips from TSMC.
To close the gap with its competitors, Intel had previously planned to spend tens of billions of dollars to build a chip factory in Ohio, with the initial goal of mass production of state-of-the-art AI chips from 2026. But in July this year, Gelsinger adjusted his strategy in an internal memo, emphasizing that companies will no longer “burn money without limits” and announced that it would slow down the construction progress of the Ohio plant in response to changes in market demand and postpone production until 2030.
