Intel Corporation's shares experienced a significant uptick recently, propelled by intensified investor optimism surrounding the company's turnaround and increased engagement from the U.S. government. The semiconductor giant has become a focal point in the administration's efforts to restore leadership in cutting-edge chip manufacturing domestically, with public endorsements contributing to the enhanced sentiment in the market.
President Donald Trump publicly lauded Intel and its Chief Executive Officer, Lip-Bu Tan, emphasizing the federal government's stake in the company and framing the investment as financially beneficial to American taxpayers. Following a White House discussion, Trump detailed his meeting with Tan on his social media platform, underscoring the administration's commitment to reshoring advanced semiconductor production back to the United States.
The U.S. government's investment in Intel materialized in August through an infusion of $8.9 billion linked to unpaid grants and manufacturing incentives established under the CHIPS Act. This infusion has coincided with Intel's shares appreciating over 70%, thereby increasing the intrinsic value of the government's equity position. The current U.S. government ownership stands at approximately 5.5% of Intel, with contractual provisions allowing this to approach 10% over time.
Despite enthusiastic claims by Trump attributing "tens of billions of dollars" in returns to this investment for the American people, financial analyses indicate that realized gains have not yet reached those magnitudes.
The recent tone of leadership support marks a contrast with remarks from the previous year when Trump encouraged Tan's resignation. These earlier concerns were amplified by Senator Tom Cotton, who cited Tan’s extensive investments in Chinese technology ventures as problematic. Tan’s background includes investments in over 600 Chinese companies and originates from Malaysia and Singapore.
Tan assumed the CEO position in March, succeeding Pat Gelsinger during a challenging period marked by Intel losing market share to competitors such as Advanced Micro Devices, Nvidia, and Arm-based chipmakers. Since taking the helm, Tan has enacted swift operational changes, including significant workforce reductions and the scaling back of certain manufacturing plans within the U.S. and Europe. Notably, Intel’s facility in Ohio is projected to become operational around 2030 or 2031.
Recent corporate announcements at the Consumer Electronics Show highlighted Intel's launch of its 18A PC chips, which the company heralded as the most advanced semiconductor process technology ever constructed within the United States. President Trump emphasized this milestone, describing the 18A chip as the first sub-2 nanometer central processing unit (CPU) that was designed, fabricated, and packaged on American soil.
While Intel has achieved advancements in domestic production capabilities, it continues to depend on Taiwan Semiconductor Manufacturing Co. for a segment of its manufacturing. Additional investments from major industry players like Softbank Group and Nvidia have contributed to buoying investor confidence further.
Analysts remain focused on Intel’s progress in reclaiming lost market share through its innovative products. CEO Lip-Bu Tan indicated that shipments of the sub-2 nanometer 18A products are slated to commence as scheduled by the end of 2025.
From a market perspective, Intel’s shares increased by 2.48% premarket to $42.13, edging closer to their 52-week high of $44.57.