A recent agreement engineered under the Trump administration gives the U.S. government a 10% stake in Intel via federal funding, with terms explicitly structured to discourage Intel from spinning off or selling its chip manufacturing (foundry) business. The deal also includes a warrant enabling a further 5% acquisition if Intel’s foundry ownership dips below 51%.Financial Times
What the CFO Said
Intel CFO David Zinsner explained that the government’s intention behind the deal was to safeguard long-term U.S. control over the foundry unit. Should Intel reduce its ownership below the 51% threshold, the government could invoke the warrant, boosting its stake further.
Formal Restrictions on Divestment
Per the U.S. CHIPS Act funding, Intel is contractually obligated to maintain at least 50.1% ownership of its foundry business if it’s spun off. Moreover, any external investor acquiring more than 35% of voting rights or equity in the spun-off unit would only be allowed if Intel remains the largest stakeholder. These provisions are intended to preserve federal oversight and ensure continued vertical integration.
Strategic Implications
- Maintaining Domestic Manufacturing Capability: The pact ensures Intel continues to operate its foundry, supporting national tech sovereignty.
- Deterring Sale Pressure: Despite mounting losses and boardroom pressure to spin off or sell the unit, these deal terms reduce the option’s feasibility.
- Credibility Booster: By securing government backing, Intel may find it easier to attract major clients to its manufacturing capacities.
