SoftBank infuses $2 bn into Intel Corp
'Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role,' said Masayoshi Son, Chairman and CEO of SoftBank Group.
Under the terms of the agreement, SoftBank will pay $23 per share of Intel common stock. The transaction is subject to customary closing conditions.
SoftBank's investment in Intel builds upon its long-term vision of enabling the AI revolution.
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Business Standard
16 minutes ago
- Business Standard
US examines equity stake in chip makers for CHIPS Act cash grants: Report
US Commerce Secretary Howard Lutnick is looking into the government taking equity stakes in Intel and other chipmakers in exchange for grants under the CHIPS Act, which aims to spur factory-building in the US, two sources said. As part of a plan to revive US manufacturing - a key Trump agenda - Lutnick said earlier on Tuesday the US government wants an equity stake in Intel in exchange for cash grants approved by the administration of former President Joe Biden. Now Lutnick wants to expand that plan to other companies, according to a White House official and a person familiar with the situation. The Trump administration has recently made unusual deals with US companies, including allowing AI chip giant Nvidia to sell its H20 chips to China in exchange for the US government receiving 15 per cent of those sales. The Pentagon is slated to become the largest shareholder in a small mining company to boost output of rare earth magnets. The government's intervention in corporate matters has worried critics who say President Donald Trump's actions create new categories of corporate risk and that a bad bet could mean a hit to taxpayer funds. Much of the funding under the CHIPS Act has not yet been dispersed for companies such as Micron, Taiwan Semiconductor Manufacturing Co, Samsung and Intel. TSMC and Intel declined to comment. Micron, Samsung and the White House did not respond to requests for comment on whether Lutnick is considering more stakes. The two sources told Reuters on Tuesday that Treasury Secretary Scott Bessent is also involved in the CHIPS Act discussions, but that Lutnick is driving the process. The Commerce Department oversees the $52.7 billion CHIPS Act money. Lutnick has been pushing the equity idea, the sources said, adding that Trump likes the idea. White House Press Secretary Karoline Leavitt confirmed earlier that Lutnick was working on a deal with Intel to take a 10 per cent government stake. "The president wants to put America's needs first, both from a national security and economic perspective, and it's a creative idea that has never been done before," she told reporters. Speaking on CNBC, Lutnick said the US wants a return on its "investment". "We'll get equity in return for that ... instead of just giving grants away," he said. Trump has previously said he wanted to kill the CHIPS Act program. Lutnick's comments suggested any stake would be non-voting, meaning it would not enable the US government to tell the company how to run its business. His comments came a day after SoftBank Group agreed to invest $2 billion in Intel, which has struggled to compete after years of management blunders. "The Biden administration literally was giving Intel money for free and giving TSMC money for free, and all these companies just giving the money for free, and Donald Trump turned it into saying, 'Hey, we want equity for the money. If we're going to give you the money, we want a piece of the action for the American taxpayer'," Lutnick said. South Korean presidential advisor Kim Yong-beom said neither the government nor the potentially affected companies have heard about such a plan. He added that foreign companies like Samsung needed "predictability" for their US investments. A Korean chip industry official, meanwhile, said it would be hard for chipmakers to accept US government equity stakes, and some may either decide not to invest or delay investments unless Washington provides incentives like increasing funding. Taking lawmaker questions in Taipei on Wednesday and asked whether the US government could take a stake in TSMC, Taiwan Economy Minister Kuo Jyh-huei said his ministry would consult with the company, which he pointed out was private and not a state-owned enterprise. "We will also discuss with the National Development Council, as it is a shareholder of TSMC. We will thoroughly understand the underlying meaning of the US Commerce Secretary's remarks, but this will require some time for discussion and assessment," Kuo said.
Economic Times
18 minutes ago
- Economic Times
Trump thinks owning piece of Intel would be good deal for US: Here's what to know
AP President Donald Trump wants the US government to own a piece of Intel, less than two weeks after demanding the Silicon Valley pioneer dump the CEO that was hired to turn around the slumping chipmaker. If the goal is realised, the investment would deepen the Trump administration's involvement in the computer industry as the president ramps up the pressure for more US companies to manufacture products domestically instead of relying on overseas suppliers. What's happening? The Trump administration is in talks to secure a 10 per cent stake in Intel in exchange for converting government grants that were pledged to Intel under President Joe Biden. If the deal is completed, the US government would become one of Intel's largest shareholders and blur the traditional lines separating the public sector and private sector in a country that remains the world's largest economy. Why would Trump do this? In his second term, Trump has been leveraging his power to reprogramme the operations of major computer chip companies. The administration is requiring Nvidia and Advanced Micro Devices, two companies whose chips are helping to power the craze around artificial intelligence, to pay a 15 per cent commission on their sales of chips in China in exchange for export licenses. Trump's interest in Intel is also being driven by his desire to boost chip production in the US, which has been a focal point of the trade war that he has been waging throughout the world. By lessening the country's dependence on chips manufactured overseas, the president believes the US will be better positioned to maintain its technological lead on China in the race to create artificial intelligence. Didn't Trump want Intel's CEO to quit? That's what the president said August 7 in an unequivocal post calling for Intel CEO Lip-Bu Tan to resign less than five months after the Santa Clara, California, company hired him. The demand was triggered by reports raising national security concerns about Tan's past investments in Chinese tech companies while he was a venture capitalist. But Trump backed off after Tan professed his allegiance to the US in a public letter to Intel employees and went to the White House to meet with the president, who applauded the Intel CEO for having an "amazing story." Why would Intel do a deal? The company isn't commenting about the possibility of the US government becoming a major shareholder, but Intel may have little choice because it is currently dealing from a position of weakness. After enjoying decades of growth while its processors powered the personal computer boom, the company fell into a slump after missing the shift to the mobile computing era unleashed by the iPhone's 2007 debut. Intel has fallen even farther behind in recent years during an artificial intelligence craze that has been a boon for Nvidia and AMD. The company lost nearly USD 19 billion last year and another $3.7 billion in the first six months of this year, prompting Tan to undertake a cost-cutting spree. By the end of this year, Tan expects Intel to have about 75,000 workers, a 25% reduction from the end of last year. Would this deal be unusual? Although rare, it's not unprecedented for the US government to become a significant shareholder in a prominent company. One of the most notable instances occurred during the Great Recession in 2008 when the government injected nearly $50 billion into General Motors in return for a roughly 60% stake in the automaker at a time it was on the verge of bankruptcy. The government ended up with a roughly $10 billion loss after it sold its stock in GM. Would the government run Intel? US Commerce Secretary Howard Lutnick told CNBC during a Tuesday interview that the government has no intention of meddling in Intel's business, and will have its hands tied by holding non-voting shares in the company. But some analysts wonder if the Trump administration's financial ties to Intel might prod more companies looking to curry favour with the president to increase their orders for the company's chips. What government grants does Intel receive? Intel was among the biggest beneficiaries of the Biden administration's CHIPS and Science Act, but it hasn't been able to revive its fortunes while falling behind on construction projects spawned by the programme. The company has received about $2.2 billion of the $7.8 billion pledged under the incentives programme - money that Lutnick derided as a "giveaway" that would better serve US taxpayers if it's turned into Intel stock. "We think America should get the benefit of the bargain," Lutnick told CNBC. 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Business Standard
an hour ago
- Business Standard
Intel in talks with large investors for equity boost at discount: Report
Intel is in talks with other large investors to receive an equity infusion at a discounted price, CNBC reported on Wednesday, just days after the struggling chipmaker got a $2 billion capital injection from SoftBank Group. The new funding would be another financial lifeline for Intel, as billions of dollars in investment to expand its contract manufacturing business, which is struggling to compete with Taiwan's TSMC, has strained its balance sheet. The CNBC report, which cited people familiar with the matter, did not name the potential investors. Intel, whose shares fell 7 per cent, did not respond to a Reuters request for comment. This could be the second capital injection at a discounted price after SoftBank's investment at $23 per Intel share for a stake of just under 2 per cent. The company's shares had risen nearly 7 per cent on Tuesday on SoftBank's investment plan and had last week gained more than 23 per cent on reports of the U.S. government taking a stake. On Tuesday, Commerce Secretary Howard Lutnick said the government wants an equity stake in Intel in exchange for CHIPS Act grants approved by former President Joe Biden's administration. Intel, which had secured about $8 billion in subsidies to build factories - the largest outlay under the 2022 CHIPS Act- has significantly pared back manufacturing ambitions under new CEO Lip-Bu Tan. Years of management missteps has left the company with virtually no foothold in the booming artificial intelligence chip industry dominated by Nvidia. Of late, Intel has been on shaky ground with Washington, with U.S. President Donald Trump meeting Tan last week, after seeking his resignation over "highly conflicted" ties to Chinese firms. Intel's last fiscal year of positive adjusted free cash flow was 2021 and it recorded an annual loss of $18.8 billion in 2024, its first such loss since 1986.
