Intel stock has grown 7% since it was reported that the Trump administration was in talks with the chipmaker to have the United States government take a stake in the struggling company.
The deal would help shore up Intel’s planned factory hub in Ohio that the company once promised to turn into the world’s largest chip company, according to people familiar with the plan.
It also comes as President Donald Trump calls for more chips and high technology to be manufactured in the U.S., with Intel being the only U.S. company capable of manufacturing the fastest chips on U.S. shores, despite certain rivals already having U.S. factories.
This comes after Trump had called for Intel CEO Lip-Bu Tan to step down as he accused him of being “highly conflicted” because of concerns about his earlier ties to China.
Intel responded to this, saying Tan is “deeply committed to advancing U.S. national and economic security interests”.
“We look forward to continuing our work with the Trump Administration to advance these shared priorities, but we are not going to comment on rumours or speculation,” the spokesperson said.
Bloomberg first reported the news of the U.S. government potentially taking a stake in the chipmaker, which is the latest sign of the White House blurring the lines between state and industry.
Under Trump, the U.S. government has already taken 15% of certain Nvidia and Advanced Micro Devices chip sales to China.
The Pentagon also bought a US$400 million equity stake in rare-earth miner MP Materials and took a “golden share” in U.S. Steel as part of a deal to allow Nippon Steel to buy the U.S. industrial giant.
At the time of writing, Intel (NASDAQ: INTC) stocks rose 7.38% to US$23.86. The company’s market cap is US$104.44 billion.
