The U.S. government has agreed to acquire a 9.9 percent stake in Intel through an $8.9 billion investment in the technology company’s common stock to help achieve U.S. technology leadership and expand the domestic semiconductor industry.
Intel said Friday the investment will be funded by $5.7 billion in remaining CHIPS and Science Act grants and $3.2 billion awarded to the company under the Secure Enclave program.
“As the only semiconductor company that does leading-edge logic R&D and manufacturing in the U.S., Intel is deeply committed to ensuring the world’s most advanced technologies are American made,” said Intel CEO Lip-Bu Tan.
“President Trump’s focus on U.S. chip manufacturing is driving historic investments in a vital industry that is integral to the country’s economic and national security. We are grateful for the confidence the President and the Administration have placed in Intel, and we look forward to working to advance U.S. technology and manufacturing leadership,” added Tan.
Terms of Intel-US Government Investment Agreement
The U.S. government has agreed to buy 433.3 million shares of Intel common stock at $20.47 apiece. The ownership will be passive with no board representation, other governance or information rights. The government will vote with Intel’s board on matters requiring shareholder approval.
The agreement provides the government with a five-year warrant to purchase an additional 5 percent of Intel shares at $20 per share, exercisable only if the company ceases to own at least 51 percent of the foundry business. To establish permanency of capital, existing profit-sharing and claw-back provisions connected to previously dispersed CHIPS Act grants will be removed.
Intel previously received $2.2 billion in CHIPS grants. The latest announcement brings the U.S. government’s total investment in the company to $11.1 billion.
PJT Partners served as Intel’s exclusive financial adviser in the investment agreement.
Intel’s Expansion of US Chipmaking Capacity
The company has invested more than $100 billion in expanding its U.S. sites to broaden its domestic chipmaking capacity.
Intel expects its new chip fabrication site in Arizona to kick off high-volume production later in 2025.
