Donald Trump’s administration continues its unprecedented intervention in the chips industry, with a stake in troubled chips operator Intel on the cards.
First reported by Bloomberg yesterday (14 August), the markets seemed to like the idea of the US administration taking a stake in Intel, as its shares rose some 7pc after the news. The beleaguered chipmaker had lost more than 60pc in its share value in 2024, and the latest rise brings the 2025 increase to around 20pc.
It is all part of president Donald Trump’s administration’s strategy to ensure that the fastest chips are manufactured on US shores. Intel’s direct competitors TSMC and Samsung already have US fabs, but a recent announcement by Intel that it was halting European plans in Poland and Germany, also included slowing investment in its Ohio fab.
Reports now say that a capital injection from the US government could see a ramping up of construction at that same Ohio project – once promised to become the world’s largest chipmaking facility.
The plans appear to stem from a meeting on Monday (11 August) between Intel CEO Lip-Bu Tan and Trump and his cabinet members, although the White House is not confirming or denying the reports of the planned stake, with spokesperson Kush Desai saying “discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration”.
The White House meeting with Tan appears to have saved his leadership of Intel after a torrid week or so where senator Tom Cotton wrote to the Intel board complaining of Tan’s ties to China, and Trump called for his immediate resignation.
“I met with Mr Lip-Bu Tan, of Intel, along with secretary of commerce, Howard Lutnick, and secretary of the treasury, Scott Bessent,” the US president said in a social media post on Monday. “The meeting was a very interesting one. His success and rise is an amazing story. Mr Tan and my cabinet members are going to spend time together, and bring suggestions to me during the next week.”
On Monday, Intel followed the Trump meeting with a statement that said: “We look forward to working closely with him and his administration as we restore this great American company.” Yesterday, it unsurprisingly told Bloomberg it would not comment on the current speculation.
If this intervention is confirmed, it follows hot on the heels of the recent unprecedented (that word again) agreement by AMD and Nvidia to pay the US administration a 15pc cut of revenues from sales of its chips to China, in return for being granted export licences.
It would not be a first intervention for this US government though, as its Department of Defense in July said it was taking a preferred equity stake in US rare earth producer MP Materials Corporation.
“This initiative marks a decisive action by the Trump administration to accelerate American supply chain independence,” James Litinsky, the MP Materials founder and CEO, said at the time.
In June, the US administration took a ‘golden share’ in US Steel, in return for its sale to Japanese rival Nippon Steel being cleared to proceed. The agreement meant the government would have the final say on anything from closing factories to cutting jobs.
The market reaction is no surprise, as any capital injection into Intel would strengthen its hand at a time when it is reorganising, pausing investments and laying off thousands of staff, including at it’s Irish plant.
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