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Intel’s deal with the Trump administration goes beyond a mere stake acquisition; it aims to strengthen the company’s advanced chip manufacturing capabilities. According to Intel executives, without significant financial incentives, they cannot compete with TSMC.
The industry viewed this deal skeptically because giving Intel a portion of its company without clear benefits seemed unwise. However, based on a Wall Street Journal report, there is more to the agreement than just a 10% stake. The government will work to get Intel’s cutting-edge processes, such as the 18A, manufactured in America. Intel executives have emphasized that they need substantial incentives from the government to stay competitive with TSMC.
This deal is crucial for Intel and its foundry division, especially considering that the current leadership has stated it would abandon the race for advanced nodes if there’s little external volume. Given the Trump administration’s influence, Intel could adopt chips from Apple and NVIDIA, which could catalyze their production plans and provide a viable challenge to TSMC.
For context, the Taiwanese government is the largest shareholder in TSMC, showing the importance of government intervention in securing foundry businesses through financial incentives. Interestingly, President Trump recently called out Intel’s CEO Lip-Bu Tan for being “highly conflicted,” indicating his interest in micro-managing companies like Intel. This suggests that the U.S. government will play a significant role in shaping Intel’s future.
The success of Intel Foundry Services (IFS) now hinges on the outcome of the 18A process, particularly with internal products like Panther Lake mobile CPUs and Clearwater Forest Xeon server processors. With direct involvement from the Trump administration, there’s now an increased likelihood of external adoption of Intel’s advanced chips.
