Intel (INTC) Stock: Government Eyes 10% Stake as Manufacturing Crisis Deepens

TLDR

Table of Contents

White House confirms talks for 10% Intel stake using remaining $8.7B in Chips Act funding
SoftBank invested $2B for 2% ownership at discounted $23 per share price
Intel’s five-node manufacturing plan failed, burning $100B with minimal external customers
Stock down 66% since 2020, now trading near book value after technology struggles
Company lost $45B over 3.5 years, desperately needs new funding to survive

The White House confirmed discussions about acquiring a 10% stake in Intel Corporation through existing Chips Act grants. Commerce Secretary Howard Lutnick explained the deal could swap government funding for equity ownership.

Intel received $10.9 billion in Chips Act funding but only $2.2 billion has been disbursed. The remaining $8.7 billion gives the government leverage for the equity deal.

The potential stake would dilute Intel shareholders by 9%. What began as free government assistance now carries ownership strings attached.

SoftBank Investment Signals Confidence

SoftBank Group announced a $2 billion investment in Intel this week. The Japanese firm acquired approximately 2% of Intel at $23 per share.

SoftBank to invest $2bn in Intel to back US chipmaking https://t.co/WO7gFrG1j6
— Financial Times (@FT) August 18, 2025

This represents a discount to Intel’s market price that day. Intel is reportedly seeking similar deals with other private investors.

The SoftBank investment pushed Intel shares up nearly 7%. Some investors see turnaround potential despite ongoing challenges.

Intel desperately needs cash. The company lost $45 billion over the past 3.5 years when subtracting capital expenditures from operational cash flows.

In 2025 alone, Intel burned $6 billion using this metric. The company held $21 billion in cash at June’s end.

Manufacturing Strategy Collapse

Intel’s crisis stems from manufacturing failures rather than funding alone. Former CEO Pat Gelsinger launched an ambitious five-node plan in 2021.

The strategy promised five new manufacturing processes in four years. Only the first node achieved meaningful success.

The first node produced five different Intel chip lines from 2021 to 2023. Subsequent nodes failed to attract external customers or deliver results.

Intel spent over $100 billion building these manufacturing capabilities. The manufacturing segment earned just $53 million from outside customers in 2025’s first half.

Meanwhile, the division posted a $5.5 billion operating loss. Intel’s foundry business remains far behind Taiwan Semiconductor Manufacturing.

Current CEO Lip-Bu Tan shifted strategy completely. Instead of building first and hoping customers follow, he wants confirmed customers before major investments.

President Trump initially criticized Tan on social media, demanding his resignation. Intel stock dropped over 3% that day.

After Tan visited the White House, Trump’s tone changed. He announced cabinet members would work with Tan on solutions.

Intel stock rose more than 3% following Trump’s revised statement. This sparked two weeks of financing speculation.

The stock trades near book value, down 66% since its January 2020 peak. Investors value Intel at little more than its assets minus liabilities.

Intel faces intense competition from Nvidia, AMD, and Taiwan Semiconductor. The company can produce advanced chips but has fallen behind in artificial intelligence markets.

The government stake represents an unusual intervention in private industry. Officials cite national security concerns about domestic semiconductor production.

Intel announced major Ohio expansion as part of boosting American chipmaking capacity. However, execution remains the company’s biggest challenge.

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