Trump administration considers buying piece of Intel, Bloomberg reports

The Trump administration might take an ownership stake in Intel, Bloomberg reported Thursday, an extraordinary step that could boost the chipmaker’s financial position — but might do little to address its deep technological woes.

Administration officials hope a cash infusion could help boost Intel’s factory network, Bloomberg reported, citing anonymous sources. One goal would be to revive plans for new Intel factories in Ohio, which Intel has shelved indefinitely.

Intel’s shares jumped 7.4%, to $23.86, on the news.

Bloomberg said it wasn’t clear how much of Intel the federal government would buy but said the possibility emerged from talks between President Donald Trump and Intel CEO Lip-Bu Tan. It’s also unclear whether the government would pay market rates for Intel shares.

Just last week, Trump called for Tan’s resignation — apparently because Tan had previously invested in Chinese semiconductor businesses. “There is no other solution to this problem,” the president wrote on social media.

But Trump backed down almost immediately, hosting a meeting with Tan on Monday and then declaring that Tan’s business “success and rise is an amazing story.”

Now, the Trump administration is apparently considering a radically different path from the one the president demanded last week.

Buying part of Intel would be an extraordinary step that would significantly deepen the federal government’s role in the private sector, analogous to the government rescue of the domestic auto industry or bank bailouts during the Great Recession.

More recently, the Trump administration took a “golden share” in U.S. Steel that gives the sitting president extraordinary influence over the company in exchange for permitting its sale to a Japanese company, Nippon Steel.

It’s unclear what influence Trump would seek to hold at Intel for himself and his successors. Like semiconductors at Intel, though, the domestic manufacturing of steel at U.S. Steel is viewed by the president and policymakers as a national security imperative.

Security concerns also led the U.S. to restrict the sale of advanced computer chips to customers in China. Earlier this week, though, the Trump administration announced that the federal government would take a 15% share of revenues semiconductor businesses Nvidia and AMD earn from sales in China in exchange for licenses to sell certain chips there.

Intel did not respond to a request for comment on Thursday’s report. It told other media outlets that, “Intel is deeply committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership.”

Thursday’s report is the latest in a series of accounts dating back several months about the possibility the federal government might pursue some kind of financial bailout for Intel, which is struggling after a series of missteps cost the company its technological leadership.

None of the other reports bore out, but none had suggested that the federal government would actually buy a piece of Intel.

Intel is Oregon’s largest corporate employer and the only advanced semiconductor manufacturer based in the U.S. The company develops its most advanced computer chips in Hillsboro.

Politicians of both parties have warned that retaining domestic chip technology is essential to America’s economic future and its national security. But Intel’s sales have fallen by a third in the past few years and it has been shedding market share in all parts of its business.

Intel laid off 15,000 workers across the company last month, including at least 2,400 in Oregon.

The Biden administration awarded Intel $7.9 billion in federal subsidies last year, drawing from the bipartisan CHIPS Act. The Biden administration paid out $2.2 billion, but the Trump administration has withheld the rest. Intel said last month that it had submitted claims for $850 million for which it believes it has qualified.

When Intel reported quarterly financial results last month, Tan said commitments for new factories in Ohio and Europe — made by his predecessor, Pat Gelsinger — “were well ahead of demand and were unwise and excessive.”

It’s not clear how, or if, selling a piece of Intel to the feds would increase demand for the company’s chips.

Also last month, Intel warned it might abandon its advanced manufacturing business altogether if it can’t find outside companies willing to hire Intel to make their chips. Some observers wondered at the time whether Intel might be bluffing, hoping to spur the federal government to become more supportive of Intel.

— Mike Rogoway covers Oregon technology and the state economy. Reach him at mrogoway@oregonian.com or 503-294-7699.

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