On August 23, Beijing time, Intel announced that it had reached a historic agreement with the Trump administration. The U.S. government will invest US$8.9 billion in Intel Corporation to purchase its common shares. The company is further expanding its stable semiconductor supply chain worth more than $100 billion.
Intel said the U.S. government's equity funding will come from a $5.7 billion grant previously issued to Intel but not yet disbursed under the U.S. Chip and Science Act, as well as a $3.2 billion grant issued to the company as part of the "Safe Quarantine" program. This $8.9 billion investment, combined with the $2.2 billion in "chip" grants Intel has received so far, brings the total investment to $11.1 billion.
Chen Liwu, CEO of Intel Corporation, said: "President Trump's focus on U.S. chip manufacturing is driving large-scale investment in this vital industry, which will have an important impact on the U.S. economy. We are very grateful to Trump and the administration for their trust in Intel and look forward to working together with all parties."
U.S. Commerce Secretary Howard Lutnick said: "Intel is very pleased to welcome the United States to join us as a shareholder, which will help build the most advanced chips in the world." "As more and more companies consider investing in the United States, this administration remains committed to solidifying the United States' leading position in the field of artificial intelligence."
Under the terms of today's announcement, the U.S. government has agreed to purchase 433.3 million shares of Intel common stock, equivalent to a 9.9% stake in the company, at a price of $20.47 per share. The investment provides U.S. taxpayers with a discount to current market prices, while also allowing the U.S. government and existing shareholders to benefit from Intel's long-term business success.
The U.S. government's investment in Intel will be a passive shareholding, with no board representation and no other governance or information rights. The government also agreed to vote unanimously with company boards on matters requiring shareholder approval, subject to limited exceptions.
The U.S. government will receive a five-year authorization letter priced at $20 per share to acquire an additional 5% of Intel common stock, but this right can only be exercised when Intel no longer owns at least 51% of the foundry business.
According to the US$2.2 billion previously allocated to Intel under the Chip Act, the original clawback and profit sharing provisions will be canceled to ensure the stability of capital, thereby helping the company advance its investment plans in the United States.