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Chip designer Intel’s shares rose 2% today after CFO David Zinsner outlined at Citi’s 2025 Global Technology, Media And Telecommunications Conference that the firm was on track to close its Altera divestment. During the event, Zinsner shared details about the US government’s historic 10% stake in Intel, emphasizing it as a great deal for taxpayers and the American people.
Intel CFO Says Firm Will Use US Equity Funds to Clear Out Its Debt Due by 2025 End
Zinsner explained that before the US government’s investment, Intel had approximately $5.7 billion in grants yet to be received and another $2.2 billion already received under government funding with clawback rights. He noted that the future of an additional $3 billion from CHIPS Act Secure Enclave funding was uncertain at that time. According to Zinsner, US investment eliminated uncertainty and exchanged it for equity, with Intel receiving money upfront except for the $3 billion paid over a couple of years.
Addressing concerns about government interference in Intel’s affairs, Zinsner stated that the government would vote according to board recommendations. He added that Intel’s Altera divestment was expected to close soon, providing an additional $3.5 billion. Softbank’s investment should also be completed by the end of the quarter once regulatory requirements are met.
Intel plans to use this money to pay off $3.8 billion in debt maturing this year and intends not to refinance any of it, Zinsner said. When asked about potentially spinning off its Foundry business into a subsidiary for external customer investment, he suggested it was unlikely in the near future due to current investability issues but could happen down the road.
Zinsner acknowledged that Intel had spent money ahead of demand over the past few years and admitted CEO Lip-Bu Tan’s growing confidence with the firm’s next generation 14A process. While there is a possibility that not getting a customer with this process might lead to no capacity build, Zinsner believes the likelihood is relatively low.
The 14A process will be more expensive than 18A due to increased investment in High NA EUV tools and additional lithography steps, he explained.
Over the past couple of years, Intel has started using TSMC’s foundries for some product components. Zinsner noted that Intel’s dependence on TSMC would fluctuate based on Foundry business performance and specific products produced. However, TSMC remains a great partner due to their technology and support, as evidenced by ongoing use of their Lunar and Arrow Lake products.
Currently, 30% of Intel’s products come from TSMC, with the percentage expected to drop but still be higher than in previous years.
