President Trump pressured Intel over Chips Act funding, prompting CEO Lip Bu Tan to transfer 10 percent of the company—about 433 million shares—to the US government in exchange for $8.9 billion. Intel previously invested tens of billions in domestic fabs anticipating government support. The agreement converts a subsidy into an equity stake, leaving the government as a sizable shareholder. Intel has received only $2.2 billion so far while its foundry push burns $3.17 billion quarterly. Similar pressure tactics prompted TSMC to pledge major US investment, raising questions about whether commitments will persist beyond the current administration.
And so, in a desperate attempt to cut through the red tape, new-ish Intel CEO Lip Bu Tan on Friday conceded 10 percent of his company, about 433 million shares, to Uncle Sam in exchange for $8.9 billion of funding held hostage by the current administration. Remember, Intel has already spent tens of billions of dollars on fabs with the understanding its investments in US manufacturing would be rewarded.
From the sidelines, it's hard not to see this deal as extortion. The President after all was holding all the cards. Intel has received just $2.2 billion in subsidies owed under the Chips Act so far, and with the division burning through $3.17 billion a quarter as it strives to enter the foundry business in a big way, Chipzilla could use as much capital as it gets.
Trump played a similar game back in March when he used the specter of massive semiconductor tariffs - which still haven't materialized - to scare TSMC into bolstering its US investment to the tune of $100 billion. Will TSMC actually build all those fabs or scale back the moment Trump is out of office? Who knows? But it's largely the same story, with Trump playing the part of the New York mob
Collection
[
|
...
]