Last Friday, August 22nd, a significant announcement was made regarding the US government's acquisition of a substantial stake in Intel. The government will invest $8.9 billion to purchase 433.3 million shares of Intel stock. Combined with the previous $2.2 billion from the CHIPS Act, the US government has now become Intel's largest shareholder.

The remarkable aspect of this transaction is that these funds were originally designated as subsidies for Intel under the CHIPS Act. Through this restructuring, the subsidies have been converted directly into equity stakes.

Following negotiations and pressure regarding leadership changes, Intel agreed to the arrangement. This development should not be viewed in isolation. NVIDIA and Advanced Micro Devices are required to remit 15% of their China sales revenue to the US government. US Steel's acquisition by Japan's Nippon Steel is subject to US government golden share veto power. The US government also remains the largest shareholder of MP Materials, the nation's only rare earth enterprise.

Many observers focus on the financial calculations, noting that even if the $8.9 billion investment doubles during the current administration, it would amount to minimal per-capita impact. However, the broader implications extend beyond immediate financial returns.

According to the agreement, the US government will not interfere with day-to-day business operations. However, the role and influence of being the largest shareholder raises questions about the extent of non-interference.

The strategic rationale appears to center on Intel being among the few remaining US-headquartered semiconductor companies capable of domestic chip production without relying on Taiwan Semiconductor Manufacturing. While the current CEO has been in position for only five months, there remains potential for operational improvements.

Intel historically dominated the CPU market with over 80% market share in the PC segment. However, recent years have seen significant challenges from Advanced Micro Devices, NVIDIA, and the artificial intelligence revolution.

In both PC and server markets, Intel's market share has declined at approximately 10% annually, being eroded by Advanced Micro Devices. The 13th and 14th generation CPU issues caused significant consumer impact, while gaming performance has been consistently outperformed by Advanced Micro Devices' X3D series processors.

A pivotal moment occurred on February 15, 2022, when Advanced Micro Devices' market capitalization officially surpassed Intel's. Currently, Advanced Micro Devices' market value is 2.5 times that of Intel.

In the AI sector, Intel projected only $500 million in AI chip sales for 2024. In critical chip manufacturing, Intel has consistently lagged behind Taiwan Semiconductor Manufacturing in important 10nm and 7nm processes, despite significant investments, resulting in higher costs and lower yield rates compared to competitors.

While Intel continues developing advanced processes, including Intel 3 and the upcoming A18 (Intel 1.8nm), performance varies significantly even with similar process nodes due to differences in logic processes, memory stacking, and thermal management capabilities.

Former Commerce Department officials attempted to promote Intel products to Advanced Micro Devices and NVIDIA, but both companies declined, expressing no interest. Currently, many of Intel's own chips are manufactured by Taiwan Semiconductor Manufacturing, reflecting confidence issues in internal production capabilities.

Intel's Arizona facility, announced by President Obama in 2012 for production the following year, did not achieve actual output until 2020 - a seven-year delay. During this period, 14nm technology evolved from cutting-edge to outdated as 3nm approached mass production. The Ohio facility is not expected to be completed until 2030.

Due to manufacturing challenges, Intel reported a $18.8 billion loss in 2024. The company has considered divesting its manufacturing operations. New CEO Pat Gelsinger indicated in July internal memos that unconditional investments would cease, with factory construction adjusted based on market conditions.

This approach appears to mirror successful state-owned enterprise models, established to manage state capital while ensuring value preservation and growth, focusing on sectors critical to national security and economic development.

From this strategic perspective, semiconductors, steel, and rare earth materials represent key areas of national security and economic importance. The model demonstrates how market competition principles can be adjusted when national strategic interests are at stake.