Intel shares rose nearly 4% at the start of trading on Friday after reports suggested that the Trump administration is considering taking a stake in the struggling U.S. chip giant, a move that could reshape the country’s semiconductor industry.
According to Bloomberg, which first reported the talks, citing people familiar with the discussions, said that the US government could use the $52 billion CHIPS Act funds to invest directly in Intel. The CHIPS Act is a legislation signed in 2022 under President Joe Biden to strengthen domestic chipmaking.
Intel received nearly $8 billion from this program last year, the single largest award under the law to build new factories in Ohio and other states. However, the progress has faced delays and cost-cutting under current CEO Lip-Bu Tan, who has pulled back from the bold expansion plans championed by his predecessor, Pat Gelsinger.
Ease Financial Pressure
For Intel, federal support could ease immediate financial pressures but won’t erase the steep climb ahead. Once the undisputed leader in chip technology, the company is struggling to regain ground against rivals.
Intel has been losing market share to Taiwan’s TSMC in manufacturing precision, Nvidia in artificial intelligence (AI), and AMD in both PCs and data centers. Its latest manufacturing technology, known as “18A,” has also run into problems with production yields remaining worryingly low, according to a previous report from Reuters.
Despite these challenges, analysts say the US government stake could buy Intel more time to turn its foundry business — which manufactures chips for other companies — into a sustainable operation. “It could be a game-changer,” said Matt Britzman, senior equity analyst at Hargreaves Lansdown, adding that “government support might help shore up confidence, but it doesn’t fix the underlying competitiveness gap in advanced nodes.”
Meanwhile, the White House has downplayed the “speculative” reports. “Discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration,” spokesperson Kush Desai said.
Intel also declined to comment directly, but reiterated that it is “deeply committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership.”
Despite the denials, the news sparked immediate excitement on Wall Street, with Intel’s shares jumping more than 7% Thursday and the market value rising to roughly $104 billion. That’s a welcome turnaround for investors after a disastrous 2024, when Intel lost nearly 60% of its value, before clawing back a 19% gain this year.
The news comes just days after President Donald Trump met with CEO Lip-Bu Tan at the White House — a striking shift after the president had publicly called for Tan’s resignation over his alleged links to Chinese tech firms.
