According to reports, the Trump administration is exploring the feasibility of acquiring a 10% stake in chip giant Intel. If the deal materializes, the US government could become Intel's largest shareholder.

Under the investment framework currently under review, the US government plans to convert some or all of the subsidies provided to Intel under the CHIPS and Science Act into equity stakes. Previously, Intel has been approved for government subsidies totaling approximately $11 billion to support the construction of production lines for commercial and military chips.

Based on current market valuation, a 10% stake corresponds to approximately $10.5 billion, which essentially aligns with the predetermined subsidy scale. However, the structure and terms of the potential equity investment by the US government have not been finalized, and whether the White House will proceed with the plan remains uncertain.

White House spokesperson Kush Desai declined to comment on negotiation details, only stating that no deal is final until the government makes an official announcement.

This equity conversion mechanism could potentially extend to other companies funded by the CHIPS Act. However, whether this policy concept has formed consensus within the US government and whether relevant companies have begun consultations on this matter remains unknown.

**Repurposing CHIPS Act Funds**

In August 2022, then-President Biden signed the CHIPS Act, promising to invest $39 billion to revitalize domestic semiconductor manufacturing, with the goal of increasing America's chip production capacity share from 12% to 20% by 2030.

According to the Semiconductor Industry Association (SIA), the US CHIPS Program Office has announced $32.542 billion in grants and $5.5 billion in loans to fund 48 projects across 32 companies.

As the largest beneficiary of the act, Intel is eligible for $8.5 billion in direct funding and an $11 billion loan facility, primarily for new construction and expansion projects of fabs in Ohio and other locations. Under the act's phased disbursement mechanism, Intel has received $2.2 billion in subsidies before the Trump administration took office.

However, Trump has consistently opposed this act. In March this year, Trump explicitly stated in a Congressional speech his desire to repeal the act, saying "whatever remaining funds there are can be used to reduce debt or for any other purpose you (Congress) deem appropriate."

Commerce Secretary Lutnick is reportedly seeking ways to improve the return on investment of these funds, aiming to enhance the utilization of funds obtained by companies like Intel under the act. He believes that converting these funds into equity investments could be the best way for the US government to support Intel while protecting taxpayer interests.

Currently, specific operational details remain highly uncertain, including key questions such as whether the already disbursed $2.2 billion will be included in equity calculations and the timing of future fund allocations.

The proposal does not necessarily mean Intel will receive more government support than expected, but funding may arrive faster.

Currently, Intel is facing losses and other challenges. In March this year, the company hired semiconductor investor and executive Patrick Chen as its new CEO. Chen proposed plans to cut staff, develop new AI strategies, and focus on finding customers for Intel's future chip technologies.

Earlier this month, Trump criticized Chen, claiming he had "conflicts of interest" and demanding his immediate resignation. However, after the two met at the White House, Trump changed his stance and praised Chen for having "an amazing story." The two reportedly discussed the US government's acquisition of Intel shares.

Additionally, on Monday (August 18) local time, SoftBank Group and Intel jointly announced that the former would purchase $2 billion worth of the latter's stock, an agreement aimed at "deepening both parties' commitment to US chip innovation." Following the announcement, Intel's stock price rose approximately 5% in after-hours trading. The stock closed at $23.66 in New York, up 18% year-to-date.

**New Trend of Enhanced Government Industry Intervention**

If this transaction ultimately materializes, Intel's equity deal would represent another典型case of the Trump administration's deep involvement in the private sector.

In June this year, when approving Nippon Steel's acquisition of US Steel, the Trump administration introduced a "golden share" mechanism, granting the US government veto power over major decisions through national security agreements.

Additionally, Trump successfully secured a 15% revenue share from certain semiconductor sales to China.

Freshfields law firm stated in its latest "Foreign Investment Perspective" that making the actual issuance of "golden shares" a prerequisite for transaction approval is unprecedented in the context of Committee on Foreign Investment in the United States (CFIUS) reviews.

The report indicates that the US government is not merely using "golden share" as shorthand for a series of governance rights. Instead, the US government will permanently retain non-economic preferred shares, enabling government control over US Steel's major business decisions.

"This move is highly unusual because in modern history, the US government has only taken stakes in companies to save those playing important roles in the economy, such as investments in General Motors, Fannie Mae, and Freddie Mac during the previous financial crisis," the report stated.

Furthermore, in July, the Department of Defense made a $400 million preferred stock investment in US rare earth producer MP Materials. This transaction will make the Defense Department the company's largest shareholder with approximately 15% ownership.