US Stake in Intel Intel with US Government Participation: TSMC Draws the Line

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Intel and the US government have reached an agreement: The government buys Intel common stock for 8.9 billion US dollars, but is not entitled to vote. Other companies such as TSMC would rather give back the funding from the Chips Act than allow a US stake.

On August 22, 2025, everything was wrapped up, according to the Intel press office: The US government is investing 8.9 billion US dollars in Intel common stock. The government investment is financed by the remaining 5.7 billion US dollars in grants previously awarded to Intel under the US Chips and Science Act but not yet paid out. An additional $3.2 billion will come from the Secure Enclave program that was awarded to the company. "The $8.9 billion investment is in addition to the $2.2 billion in CHIPS grants Intel has received to date, bringing the total investment to $11.1 billion," the announcement.

In detail, the transaction comprises 433.3 million ordinary shares in Intel for 20.47 US dollars per share, which corresponds to a 9.9 percent stake in the company. However, this is a passive investment, which in turn means that there is no US government representation on the board or other governance or information rights. "The government also agrees to consult with the company's board of directors on matters requiring shareholder approval," the press release states. In addition, the government will receive a five-year option to purchase an additional five percent of Intel common stock for $20 per security, which can only be exercised if Intel no longer holds at least 51 percent of the Foundry business.

Intel customers such as Dell, Microsoft, HP and AWS have endorsed the deal. Analysts at Bank of America spoke of both advantages and disadvantages ahead of the pending transaction. "Such an investment could increase the attractiveness of onshore manufacturing to potential fabless partners, but could also bring disadvantages, including dilution for existing shareholders and pressure to restart large projects such as the Ohio factories," is summarized at Yahoo Finance.

TSMC Would Return Subsidies

In the wake of speculation as to whether the US government is getting involved with Intel and possibly showing interest in acquiring stakes in other companies, the Wall Street Journal (WSJ) reported that TSMC's managers would rather return the grant money. That would be around 6.6 billion US dollars, which was granted for the projects in Arizona under the Chips Act.

"Taiwan Semiconductor Manufacturing executives have held initial talks about returning their U.S. government subsidies if the Trump administration seeks a stake in the company, according to people familiar with the discussions," the WSJ editorial board notes. There are no official statements on this topic.

Apparently, there is nothing to worry about in the management team of the world's largest contract manufacturer anyway. Speaking to reporters from Reuters, a White House representative confirmed that they have "no similar plans for larger companies that boost US investment, such as TSMC and Micron." (sb)