The U.S. government’s recent investment in Intel includes contractual language designed to discourage the company from spinning off or selling its foundry operations, company executives say.
Deal structure and U.S. equity stake
Intel agreed to provide a 10% equity stake to the U.S. government as part of a broader arrangement tied to federal support. At a Deutsche Bank conference, Intel CFO David Zinsner explained elements of the agreement that limit Intel’s flexibility over its foundry unit.
According to reporting in the Financial Times and remarks from Zinsner, the terms include mechanisms that would penalize Intel if it reduces its ownership of the foundry business below a defined threshold in the coming years.
Warrant could increase federal ownership if foundry is spun out
The deal contains a multi-year warrant allowing the government to acquire an additional stake in Intel at a pre-set price if Intel falls below 51% ownership of its foundry arm. Zinsner indicated he expects that option to lapse, but acknowledged its role as a deterrent to a spin-off.
White House press secretary Karoline Leavitt said officials were still finalizing aspects of the agreement, underscoring the administration’s interest in keeping control over how federal incentives shape domestic chip manufacturing.
Cash infusion tied to CHIPS Act grants
Intel also reported receiving a significant cash payment linked to previously awarded CHIPS and Science Act grants. Reuters cited company figures showing roughly $5.7 billion disbursed as part of that funding.
Those federal grants were aimed at encouraging semiconductor production on U.S. soil, but the new equity arrangement shows officials want more influence over how public funds affect corporate strategy.
Intel Foundry’s mounting losses
Intel’s foundry efforts have been a drag on corporate results. The unit reported an operating loss of about $3.1 billion in the most recent quarter, raising pressure from investors, analysts, and some board members to consider restructuring options.
Calls to separate the foundry business gained traction last year, particularly after the sudden departure of Pat Gelsinger, the executive who had driven the foundry strategy. The new financing terms curb near-term options to pursue a sale or spin-out.
Reshoring chips and competitive dynamics
U.S. officials have framed interventions as part of a broader industrial policy to counter the industry’s reliance on offshore fabrication, notably Taiwan Semiconductor Manufacturing Company, which remains the dominant contract manufacturer globally.
The warrant and equity condition reflect policymakers’ desire to use federal support to keep advanced manufacturing under domestic control, even when that requires propping up divisions that are not yet profitable.
Market and governance implications
For Intel, the arrangement is a trade-off: immediate financing and government backing in exchange for limits on corporate maneuvering. Investors and analysts will be watching whether the company can turn the foundry business around without the option of a rapid divestiture.
Industry observers say the structure could become a model for future public-private partnerships in strategic sectors, where governments attach governance conditions to ensure long-term domestic capacity.
Intel declined further comment beyond executives’ remarks at the conference. Major outlets including the Financial Times and Reuters provided initial reporting on the terms and reactions from company leadership and Washington.
As the CHIPS Act continues to steer capital into U.S. fabrication projects, the balance between corporate autonomy and national industrial policy will remain a central question for semiconductor companies, policymakers, and global competitors.
