Trump administration ponders over acquiring a 10% share in Intel - Potential adjustment of CHIPS Act funding to cover purchase costs
In a recent development, Intel, one of the world's leading semiconductor manufacturers, could be on the brink of a significant transformation. Reports suggest that the Trump administration is in talks to acquire a 10% stake in Intel, a move that could potentially elevate the company's status from a semiconductor company to a critical national asset.
The potential acquisition comes at a time when Intel has been grappling with challenges in semiconductor manufacturing, particularly with the upcoming 18A and 14A nodes. This stake could serve as a lifeline for homegrown chips, providing Intel with the necessary resources to overcome these hurdles.
The acquisition could also enhance Intel's influence in U.S. geopolitics and chip production. With a valuation of around $100 billion, 10% equates to $10 billion, a potential clean conversion for the stake acquisition. This move could make Intel an even more significant player in U.S. geopolitics, solidifying its role in ensuring U.S. chip independence and self-sufficiency.
The CHIPS Act, a U.S. law designed to boost the domestic semiconductor industry, could play a crucial role in this acquisition. Intel has received $2.2 billion from the Act up until January 2021, with the CHIPS Act providing the company with around $10 billion in funding. The Act operates on a milestone-based incentive system, meaning Intel could potentially receive more funding as it meets certain targets.
However, the exact committee responsible for allocating CHIPS Act funds to Intel before the 2021 negotiations concerning the 10% shares related to President Trump's administration remains unclear.
The acquisition could further solidify Intel's role in U.S. geopolitics, particularly given the national security concerns surrounding its new CEO, Lip-Bu Tan. Tan, who was installed as Intel's CEO in March 2021, has faced scrutiny due to his former ties to China. The acquisition could potentially transform Intel into a crucial entity for domestic chip production, positioning the company beyond just a semiconductor company.
Recently, around 540,000 Intel shares were suddenly purchased by a group of investors, suggesting that the market is anticipating this potential acquisition. The acquisition, if successful, could strengthen Intel's position in the U.S. chip market, making it a key player in U.S. chip self-sufficiency and a critical national asset.
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