TLDR
- Intel stock jumped 7.4% Thursday and gained another 2.3% Friday premarket on government stake reports
- Trump administration discussing potential U.S. government investment in Intel to support domestic manufacturing
- Talks focus on helping Intel expand its delayed Ohio factory hub project
- Government stake size remains unclear but would align with broader semiconductor security goals
- News follows recent meeting between President Trump and Intel CEO Lip-Bu Tan
Intel shares rocketed higher after Bloomberg reported the Trump administration is exploring taking a government stake in the struggling chipmaker. The stock closed Thursday up 7.4% at $23.86 and tacked on another 2.3% in premarket Friday trading.
The potential investment would help Intel expand domestic semiconductor manufacturing. The focus centers on the company’s repeatedly delayed factory hub in Ohio.
Bloomberg cited people familiar with the matter for the report. Intel had previously announced plans to make the Ohio site the world’s largest chipmaking facility.
The discussions reportedly stem from a meeting this week between President Trump and Intel CEO Lip-Bu Tan. While talks continue, the size of any potential government stake remains unclear.
Sources indicate the U.S. government would pay for the investment. The move would align with broader efforts to strengthen domestic semiconductor production.
Intel declined to comment on the report when contacted by Barron’s. White House Spokesman Kush Desai called discussion about hypothetical deals “speculation unless officially announced by the Administration.”
Recent CEO Drama Sets Stage
The talks come after a turbulent month for Intel and its relationship with Trump. The president wrote on Truth Social August 7 that CEO Lip-Bu Tan “is highly CONFLICTED and must resign, immediately.”
That post followed a letter from Sen. Tom Cotton to Intel’s board chair. Cotton raised questions about Tan’s connections to Chinese firms.
Tan subsequently met with Trump earlier this week. The president described the meeting as “very interesting” on social media.
“Mr. Tan and my Cabinet members are going to spend time together, and bring suggestions to me during the next week,” Trump added. The meeting appears to have smoothed relations between the two.
Trump has pushed large tech companies to manufacture products domestically. Apple CEO Tim Cook joined a White House press conference this month announcing plans to invest $600 billion in the U.S. over four years.
Manufacturing Challenges Mount
Intel faces major challenges in recent years including manufacturing delays and increased competition. The company has worked to revitalize its manufacturing capabilities and regain technological leadership.
Intel hopes to regain market share in chip manufacturing from Taiwan Semiconductor Manufacturing. The company needs a major external customer to commit to using its latest processes.
CFRA Research analyst Angelo Zino sees potential benefits from government participation. “The greater government participation, aimed at boosting U.S. chip manufacturing, could seek to push and/or encourage U.S. fabless chipmakers to leverage Intel’s U.S. facilities,” he wrote.
However, Zino tempered expectations about the news. “That said, it is hard to get overly excited on the Intel story given this news doesn’t change the chipmaker’s product business prospects.”
Intel stock has gained 19% this year through Thursday’s close. The shares hit their highest level since March 25 with Thursday’s rally.
The potential government investment reflects concerns about supply chain security and technological competition with China. Intel shares pointed 3% higher at $24.56 in Friday premarket trading.
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