The Trump administration is tightening its grip on Intel’s foundry business, structuring a new deal to prevent the chipmaker from spinning off its loss-making unit anytime soon.
At a Deutsche Bank conference on Thursday, Intel CFO David Zinsner disclosed that the U.S. government recently secured a 10% equity stake in Intel, alongside a five-year warrant that penalizes the company if it divests too much from its foundry operations. The warrant would allow Washington to claim an additional 5% stake at $20 per share if Intel’s ownership of the unit fell below 51%. Zinsner, however, suggested he expects the warrant to lapse.
The deal delivered $5.7 billion in cash to Intel this week, drawn from remaining CHIPS Act grants, Reuters reported. White House press secretary Karoline Leavitt said final details are still being negotiated.
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While the agreement underscores Washington’s push to strengthen U.S. semiconductor production, it also forces Intel to hold onto a business that’s bleeding money. Intel Foundry posted a $3.1 billion operating loss in Q2, fueling calls from analysts and investors to spin it out, discussions that intensified before the sudden retirement of CEO Pat Gelsinger, the architect of the foundry strategy, last December.
Intel has so far declined to comment further on the deal.
