Intel Corporation has just announced a historic agreement with the Trump administration, with the U.S. government making an $8.9 billion investment in Intel common stock. This investment is on top of the $2.2 billion in chips grants Intel has already received, bringing the total investment to $11.1 billion. The government will purchase 433.3 million primary shares of Intel common stock at a price of $20.47 per share, amounting to a 9.9 percent stake in the company.
Intel's continuous investment in research, development, and manufacturing in the United States is evident as the company has invested $108 billion in capital and $79 billion in R&D over the last five years. Moreover, Intel is currently undertaking a significant expansion of its domestic chipmaking capacity, with a total investment of more than $100 billion to expand its U.S. sites. This includes a new chip fabrication site in Arizona, expected to begin high-volume production later this year, featuring the most advanced semiconductor manufacturing process technology on U.S. soil.
The press release notes the support from leading technology companies, including Microsoft, Dell Technologies, HP, and AWS, for Intel's investment in strengthening the U.S. semiconductor supply chain. These companies have expressed their commitment to supporting President Trump’s agenda to achieve U.S. technology and manufacturing leadership.
The release also highlights that the government's investment in Intel will be a passive ownership, with no board representation or other governance or information rights. Additionally, the existing claw-back and profit-sharing provisions associated with the government’s previously dispersed $2.2 billion grant to Intel under the chips act will be eliminated to create permanency of capital as the company advances its U.S. investment plans. Following these announcements, the company's shares moved -1.35%, and are now trading at a price of $24.465. Check out the company's full 8-K submission here.
