Intel Corporation’s stock was up over 7%. This surge came on the heels of news that the Trump administration is considering buying a stake in the chipmaker. Intel CEO Lip-Bu Tan’s legendary sitdown with former President Donald Trump in the White House. This meeting was the impetus behind some of the most recent actions. The dramatic meeting took place soon after Trump publicly demanded Tan’s resignation, after Tan was accused of having improper connections to China.
Lip-Bu Tan, who succeeded former CEO of Intel Bob Swan earlier this year, finds himself in the eye of the storm. In July, 2022, he called off plans for new manufacturing plants in Germany and Poland. This raises alarm bells for Ohio, as he has suggested that development in the state would come to a crawl. These decisions were intended to serve as a check on Intel’s spending. Like many in the semiconductor industry, the company has struggled to make meaningful inroads into the lucrative new market for artificial intelligence chips.
While Tan’s semiconductor industry peers may have faced a retailing downturn, Tan has taken aim and expanded Intel’s foundry business, which produces chips for external customers. The aim of the initiative combined with massive investments, as Intel has sought to double down on expanding its advanced manufacturing capabilities. The company’s all set to take 15% of new chip sales to China. Their goals are to leave behind longtime rivals Nvidia and Advanced Micro Devices in this arena.
The government stake in Intel would give the U.S. the kind of funding necessary to build the factories that are currently being built in Ohio. This partnership fits perfectly with the U.S. government’s increasing focus on strengthening domestic semiconductor manufacturing to protect national security interests.
Following the reports of discussions between the Trump administration and Intel, a representative from the company stated, “Intel is deeply committed to advancing U.S. national and economic security interests.” They further expressed optimism about working with the Trump administration, emphasizing, “We look forward to continuing our work with the Trump administration to advance these shared priorities, but we are not going to comment on rumors or speculation.”