Quick overview

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U.S Commerce Secretary Howard Lutnick is promoting a plan that would allow the government to acquire equity stakes in Intel and possibly other chipmakers like Micron and TMC in exchange for grants under the $52 billion CHIPS and Science Act.

The Trump administration is reshaping the program, which was first started under President Joe Biden to promote domestic semiconductor manufacturing, into a model that links taxpayer funding to direct ownership.

According to a previous Bloomberg report, Lutnick has already begun talks with Intel for a possible ten percent government stake. Such a holding would be worth approximately $11 billion at Intel’s current market value, which is about equal to the $101 billion in CHIPS Act grants the company has received. These grants include $3 billion to strengthen national security-related semiconductor capacity and $7.9 billion to support its domestic investment plans.

SoftBank’s most recent investment in Intel matched the US government’s ownership stake in the company.

The Japanese corporation stated it will become the fifth-largest shareholder in Intel with a $2 billion investment in the chipmaker. According to SoftBank CEO Masayoshi Son, “this strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.”. Supported by the US government and SoftBank, Intel’s stock increased 7% on Tuesday.