U.S. authorities affirm intentions for Intel's incorporation
In a significant move, Japanese conglomerate SoftBank has invested $2 billion in Intel, becoming the sixth-largest shareholder of the tech giant. This investment comes amidst Intel's ongoing struggles, particularly in the market for artificial intelligence chips.
The US government is also set to become a major shareholder in Intel, with plans to acquire a stake of around ten percent. This stake, roughly equivalent to the value of the subsidies Intel has promised under former President Joe Biden, is expected to be in non-voting shares.
The investment by SoftBank and the potential government stake in Intel are part of a broader effort to bring more chip production back to the West. For years, Intel has faced increasing pressure in its core business of PC processors and chips for data centers, with high-tech chips, such as those used in smartphones, almost exclusively produced in Asia, mainly in Taiwan.
President Donald Trump, who has consistently advocated for American manufacturing, has welcomed this investment, stating that it is what American taxpayers deserve. Trump, who prefers high import tariffs to encourage companies to manufacture semiconductors in the US, has been a vocal critic of subsidies for chip companies, referring to them as a waste of money.
However, this is not the first time the US government has taken a stake in a major industrial company. Under Trump's administration, the US government already received a "golden share" in the takeover of US Steel by Japanese rival Nippon Steel.
Intel's stock rose by more than eleven percent to around $26 in early US trading on Tuesday, following the announcement of the SoftBank investment. This boost comes as Intel tries to build a second pillar as a contract manufacturer for other semiconductor providers, aiming to compete with market leader Nvidia, which has taken a leading position in the chips for artificial intelligence market.
The US and Europe have been trying for several years to counteract the dominance of Asian chip production. With the investment by SoftBank and the potential government stake in Intel, it seems that efforts to revitalise the chip industry in the West may be gaining momentum.
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