The U.S. government is making a significant investment in Intel, acquiring a 9.9% stake for $8.9 billion. This move converts federal subsidies from the CHIPS and Science Act into equity, demonstrating a strong commitment to domestic semiconductor manufacturing. The investment aims to bolster Intel's foundry business and secure American technological independence.
The agreement includes a provision where the government can acquire an additional 5% of Intel shares if the company's ownership of its foundry business falls below 51%. This mechanism ensures Intel maintains a controlling interest in its foundry operations. The government's stake is a passive one, with no direct control over Intel's board.
Intel will use the funds to expand its manufacturing capabilities in the United States. The investment also sends a signal to potential customers, reassuring them of Intel's stability and commitment to its foundry business. This move could encourage major tech companies to utilise Intel's foundry services, reducing reliance on foreign suppliers.
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