Shares of Intel jumped on Friday after a report claimed that the Donald Trump administration is mulling a stake purchase in the US chipmaking company that has been facing struggles in the recent time.
A Bloomberg report, which came shortly after US President Donald Trump met Intel CEO Lip-Bu Tan, said that the US government would pay for the development of Intel’s factory in Ohio.
Investors cheered on the news and the stock price hit a high of as much as 8.9 per cent on Thursday before closing 7.4% higher at the end of trading at $23.86.
The Intel shares continued their upward movement on hopes of more financial aid for the turnaround of the struggling chipmaker, rising 4 per cent on Friday.
The Ohio plant of Intel has faced setbacks, with the opening of the factory delayed to 2030.
The US government investment in Intel is also expected to shore up the chipmaker’s finances, which has been down to a point where the company has started layoffs as part of its cost-cutting efforts.
The White House however did not confirm the authenticity of the report.
“Discussion about hypothetical deals should be regarded as speculation unless officially announced by the administration,” said White House spokesperson Kush Desai.
The report comes as Trump indicated that he would announce tariffs on semiconductors next week.
Trump’s intervention
Donald Trump, who called the meeting “very interesting”, has taken an unprecedented approach to interventions and deal-making with corporate America.
His administration had struck a deal with MP Materials that would make the Department of Defense the largest shareholder of the rare-earth producer.
Federal backing could give Intel more time to revive its loss-making foundry business, analysts said, but it still faces a weak product roadmap and trouble attracting customers for new factories.
Under the Biden administration, Intel had emerged as one of the biggest beneficiaries of the 2022 CHIPS Act, as former CEO Pat Gelsinger laid out plans to build advanced factories.
Tan, however, pared back such ambitions, slowing construction of new plants in Ohio. He plans to build factories based on demand for the services, which analysts have said could put him at odds with Trump’s push to shore up American manufacturing.
