While Intel remains focused on landing a big foundry customer, its future hinges on execution, not just government backing. (Image Credits: Pinterest)
Intel Corp. (NASDAQ: INTC) confirmed that it received $5.7 billion in cash on Wednesday night, finalizing a U.S. government deal that grants Washington a 10% stake in the struggling chipmaker. The agreement, brokered directly by President Donald Trump, is designed to safeguard Intel’s position in the global semiconductor race while ensuring America retains control over its critical chipmaking capacity.
Finance chief David Zinsner disclosed the details at an investor conference on Thursday, calling the move “an incentive for Intel to retain control of its foundry business.”
The deal isn’t just financial—it's strategic. Under the terms, the government also secured a 5% warrant in case Intel’s ownership of its foundry operation drops below 51%.
“I don’t think there’s a high likelihood that we would take our stake below 50%,” Zinsner reassured investors. “So ultimately, I would expect (the warrant) to expire worthless.”
This reflects Washington’s broader goal of keeping Intel’s chip foundry business under American majority control, amid concerns about global supply chain vulnerabilities and growing competition from Asia.
Intel has been under pressure to separate its contract chipmaking arm from its design business, a move aimed at attracting outside investors and boosting competitiveness against rivals like TSMC and Samsung.
Key steps already taken include:
But Intel admitted the risk: if it fails to secure a big customer for 14A by next year, the company may have to reconsider its foundry ambitions altogether.
Despite the government backing, Intel’s stock slipped 0.6% to $24.69 on Thursday afternoon, reflecting investor caution. Analysts point out that while the $5.7 billion injection strengthens Intel’s balance sheet, the success of the foundry pivot depends on execution, not subsidies.
Zinsner attempted to cool fears: “The lawyers are always looking for areas where we should be elaborating in terms of our risks,” he said, downplaying speculation that Intel could abandon its foundry.
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For Intel, the challenge is scale. Developing cutting-edge nodes like 14A requires massive capital, and Zinsner admitted the investment makes sense only if it is supported by external customers. “The investment in 14A for only Intel’s internal use is too great to provide an appropriate return on investment for shareholders,” he noted.
Still, the company insists it will pursue “financial discipline” while building out its foundry arm, positioning itself as a long-term national asset in America’s semiconductor strategy.
Intel is betting heavily on securing a flagship client by 2026, which could validate its foundry ambitions and reassure investors. Until then, the U.S. government’s unprecedented stake acts as a safety net, both financially and strategically. As Zinsner summed up: “We don’t plan to give up control.”
