The stock price of Intel increased by 4% on Friday after reports indicated the U.S. government might acquire equity in the struggling chipmaker to support its recovery initiatives. According to Bloomberg the concept developed following CEO Lip-Bu Tan’s meeting with President Donald Trump at the beginning of the week.
The President has advocated for forceful semiconductor production relocation to the United States after expressing his criticism about Tan’s Chinese business connections. The Department of Defense acquired the largest stake in MP Materials after the administration followed this pattern with previous actions.
The federal support would enable Intel to finish its delayed Ohio plant by 2030 but experts agree this would not address fundamental problems such as technology delays and minimal AI chip presence. The 18A manufacturing process from Intel has encountered quality problems because only a limited portion of its output meets customer requirements.
Intel used to dominate advanced node manufacturing but TSMC from Taiwan took its place while Intel continues to depend on competitors for manufacturing operations. The Bernstein analysts stated that government backing would enhance market confidence yet it would not resolve the existing competitive disadvantage.
