Login to Continue Learning
In a surprising development, Intel’s shares are surging today due to reports of a substantial investment by the U.S. government.
According to Bloomberg, the Trump administration is considering purchasing a stake in Intel to aid the company’s expansion efforts for its domestic chip manufacturing capacity, particularly its long-delayed fabrication facility in Ohio. Intel had previously stated that this facility would eventually become the world’s largest chip manufacturing site, though it faced significant delays, with operations expected only in the 2030s. However, these discussions are still at an early stage, and the investment may not materialize.
The idea of a U.S. government stake in Intel first emerged during a meeting between President Trump and the company’s CEO, Lip-Bu Tan, at the White House earlier this week. During their discussion, Tan reportedly convinced Trump to change his previous characterization of him as a national security threat and demand his resignation. Instead, Trump praised Tan for “success and rise,” calling his achievements an “amazing story.”
Intel’s turnaround strategy under Tan focuses on regaining market share through advanced process technology advancements. However, the company plans to adopt its next-gen 14A node only if it secures confirmed commitments from customers.
Concurrently, Tan is working to rejuvenate Intel’s x86 ecosystem via new CPUs and GPUs, including support for Simultaneous Multi-Threading (SMT).
To reduce costs, Intel is cutting its workforce by 15% from the previous strength of 99,500. In 2023 and 2024, the company already reduced its workforce by an additional 15,000 jobs each year. Additionally, it plans to close plants in Germany and Poland.
As a result of these developments, Intel shares closed today’s regular trading session with gains of over 7% and continued to rally during after-hours trading, increasing by another 2%.
