Intel has confirmed that the United States is claiming a 10% stake in the troubled semiconductor giant. Under the terms, CNBC notes the U.S. is making an $8.9 billion investment in common stock, with $5.7 billion of it coming from unpaid CHIPS Act grants and the remaining $3.2 billion from a different government program for secure chips. The pact is “among the largest government interventions in a U.S. company” since its 2008 rescue of Chrysler and General Motors, per The New York Times.
Backed by funding from the U.S. government and Japanese investor SoftBank Group Corp., Intel Corporation is facing a rescue from bankruptcy — a last lifeline for America’s chip industry.
Intel lost ground to its Asian competitors, missing out on the smartphone revolution and the surge in AI, and waited too long to adopt ASML’s EUV lithography machines for producing advanced chips. More money flowed to shareholders, but the technological gap continued to widen.
Without leading-edge domestic chip development and large-scale production in the U.S., China could deny the United States access to advanced chip technology—by cutting off water and power supplies to TSMC’s plants, or by seizing the island.
In this week’s analysis in NRC, G Dan Hutcheson of TechInsights and Frank Bösenberg of Silicon Saxony reflect on the latest chapter in Intel’s long and winding road toward building a viable foundry business capable of competing with the Taiwanese market leader TSMC.
> Building a foundry business
TSMC manufactures chips exclusively for other companies—what the industry calls a pure-play foundry. Thanks to its scale, TSMC can invest more aggressively in new technologies than its competitors, continuously widening its lead.
Intel is aiming to adopt a similar foundry model and is considering splitting off its manufacturing operations from its chip design division. Rival AMD took this step back in 2009, when it spun off GlobalFoundries.
Dan Hutcheson remarks: “Intel must develop a culture where everyone in the company starts to think differently about manufacturing and customer relationships. That’s not easy. It took GlobalFoundries ten years, but they eventually became successful, just like Samsung.”
But Intel no longer has the luxury of time — or money. Heavy write‑downs are weighing on its balance sheet, while prospective customers hesitate to sign on. Even America’s own Tesla opted for Samsung, not Intel, in a major new chip supply deal. By threatening tariffs on imported semiconductors, Trump could strong‑arm U.S. tech companies into placing more orders with Intel. But if firms are forced to settle for anything less than the very best chips, the United States risks stunting its technological edge.
> Consequences for Europe
Intel has scrapped its expansion plans in Magdeburg, Germany, where a state-of-the-art chip factory was to be built with €10 billion in subsidies under the EU Chips Act. With the project now off the table, Brussels is debating what comes next for Europe’s semiconductor industry.
Frank Bösenberg of Silicon Saxony believes there will still be a need for a European facility capable of producing advanced chips. “Such chips are essential for the AI datacenters we want to establish as part of the European AI Continent Action Plan. And in the long run, the automotive and defense industries will also require high-performance chips. Strategically, it is important not to be dependent on other superpowers.”