US government approves $8.9 billion equity stake in Intel, contingency plan for its foundry biz

President Trump has just announced the US government has secured a 10% stake worth around $8.9 billion in Intel, calling it a "great deal" and that it's now likely to be replicated with other semiconductor companies in the near future.

The Trump administration plans to convert $7.9 billion of CHIPS Act grants meant for Intel into equity, and as an inducement to re-shore chip fabrication onto American soil, as well as the $3 billion grant that Intel received under the Secure Enclave program from the Pentagon.

Intel CEO Lip-Bu Tan posted on X saying: "Just met with President Trump to announce a historic agreement: the U.S. government is investing $8.9B in @Intel to boost American semiconductor leadership. I'm excited about the work ahead to ensure the most advanced silicon technology and computing products of the future are designed and built right here in the USA".

He continued, adding: "Thank you @potus and @howardlutnick for the confidence you have in Intel to deliver for our country".

Daniel Morgan, the senior portfolio manager at Synovus Trust, said Intel's programs weren't just limited to a cash infusion from SoftBank's recent $2 billion injection or equity interests from the US government, adding: "Without government support or another financially stronger partner, it will be difficult for Intel's foundry unit to raise enough capital to continue to build out more Fabs at a reasonable rate" and that Intel "needs to catch up with TSMC [Taiwan Semiconductor Manufacturing Company] from a technological perspective to attract business".