Trump Administration in Talks for Equity Stake in Intel for Chips Act

New US Industrial Policy Taking Shape?

U.S. Commerce Secretary Howard Lutnick is exploring having the federal government take equity stakes in semiconductor firms that receive CHIPS Act funding, potentially in exchange for grants. The plan would apply beyond Intel to major recipients like Micron, TSMC and Samsung, and involves Treasury Secretary Scott Bessent. The Commerce Department oversees $52.7 billion under the CHIPS Act; substantial subsidies to Samsung, Micron and TSMC were finalized last year. The proposal is framed as a novel, national-security– and economic-focused approach and is being renegotiated from prior grant terms.

Officials described the proposal as an unusual, “creative” arrangement tied to Chips Act funding and other subsidies aimed at boosting U.S. semiconductor capacity and national security. Intel did not comment; the company has received roughly $10.9bn in U.S. subsidies and its stock rose after related investment news.

Key points

  • Lutnick pursuing government equity stakes in chipmakers as part of CHIPS Act funding deals (Intel reportedly targeted for a 10% stake).
  • Other major CHIPS Act recipients under consideration: Micron, TSMC, Samsung.
  • Treasury Secretary Scott Bessent is involved; Lutnick is leading the effort and the White House supports the idea.
  • Commerce Department administers $52.7B CHIPS Act; previous subsidies: $4.75B to Samsung, $6.2B to Micron, $6.6B to TSMC.
  • Purpose: Increase U.S. chip manufacturing capacity and protect supply chains for national security and economic reasons.
  • Terms: Stake reportedly would not include U.S. voting/governance rights; described as an unprecedented, creative idea.
  • Financial context: Intel has received about $10.9bn in subsidies (including $7.9bn in direct Chips Act grants); the company has struggled to compete with TSMC.
  • Market moves: Intel shares rose after reports; SoftBank reportedly investing $2bn and explored buying Intel’s manufacturing arm.

Background and Context

The idea reflects heightened Washington concern about overreliance on foreign chipmakers, particularly Taiwan Semiconductor Manufacturing Co. (TSMC), which dominates advanced-node production. The Biden administration and lawmakers from both parties have pushed the CHIPS and Science Act — a roughly $52 billion program — to incentivize more domestic fabrication capacity for semiconductors used in everything from phones and cars to military systems.

Intel, once the unquestioned leader in chips, has faced production setbacks and lost ground at the cutting edge to foundry specialists like TSMC and Samsung. In response, Intel announced a multibillion-dollar strategy to invest in new fabs and to act as a foundry for others’ designs, but those plans have been costly and time consuming to execute. The proposed government stake, if it proceeds, would be part of a broader financial and policy effort to accelerate that turnaround.

Reactions and implications: lawmakers and industry stakeholders reacted cautiously. Some members of Congress welcomed creative options to secure domestic capacity and saw a government stake as an instrument to ensure continued investment and alignment with U.S. strategic objectives. Others warned about the optics and potential legal and market consequences of the government owning a direct interest in a major private corporation, even if voting rights were limited.

Analysts said several outcomes are possible:

  • A minority, nonvoting ownership could be structured as a financial investment with strings attached, such as commitments on capacity, pricing guardrails for critical customers, or domestic sourcing requirements.
  • Alternatively, the stake could be a form of preferred equity or warrants tied to performance milestones and future financing rounds, minimizing active management by the government.
  • There could be international trade and diplomatic sensitivities if the move is seen as a government intervention into global markets, potentially prompting scrutiny from allies and competitors.

Legal and political hurdles: any such transaction would have to navigate complex legal frameworks governing federal investments, national security reviews, and procurement rules. It would also face political scrutiny on Capitol Hill, where critics on both sides may object — some arguing the government should not own parts of private industry, others saying the terms must ensure robust protections for taxpayers and strategic interests.

Additionally, federal agencies would need to determine which entity — Treasury, Commerce, or a special-purpose vehicle — would hold the stake and oversee compliance with any conditions. Congressional approval or notification processes could be required depending on the mechanism used.

Softbank Investment in Intel

SoftBank will buy $2bn of newly issued Intel shares at $23 each (about a 2% stake), supporting the US chipmaker amid scrutiny and possible US government investment. The deal comes as Intel, led by CEO Lip-Bu Tan, faces financial and strategic challenges—slowed factory builds, difficulty winning major external customers, and pressure from the US administration. Analysts say the cash provides breathing room but doesn’t solve Intel’s deeper strategic problems.

Key points

  • SoftBank to invest $2bn in Intel via newly issued common stock at $23/share (~2% stake).
  • Investment framed by Masayoshi Son as support for US tech and manufacturing leadership; Intel shares rose ~5% after-hours.
  • Intel CEO Lip-Bu Tan has had a tense interaction with the Trump administration; US government is also considering a stake after Intel received $7.9bn from the 2022 Chips Act.
  • Intel faces strategic and financial strains: slowed Ohio factory builds, difficulty attracting big customers (Nvidia, Apple, Qualcomm), and risk of losing ground to TSMC.
  • Analysts: the SoftBank cash buys time but won’t resolve Intel’s fundamental strategic choices (heavy investment to catch up vs. break-up/asset sales).