Tussle for Intel: Softbank gets in, US government allegedly wants 10 percent
Softbank is now Intel's fifth largest shareholder. Meanwhile, the US government reportedly wants to acquire as much as 10 percent of the struggling company.
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Softbank has reached an agreement with Intel on an extensive share purchase. The Japanese conglomerate intends to acquire shares in the US semiconductor manufacturer for two billion US dollars. This was announced by both companies on Monday. The news was received positively on the stock markets, with the share price rising significantly in after-hours trading. Softbank has agreed to acquire the shares at a price of 23 US dollars. This is slightly below the closing price on Monday and 20 percent higher than at the beginning of the month. Meanwhile, Bloomberg reports that the US government under Donald Trump wants to acquire 10 percent of Intel shares, five times as much as Softbank. This would make the USA the largest shareholder.
Turning the tide
The struggling chip company has become the focus of US politics in recent weeks because it is the only company in the USA that can produce the most powerful semiconductors. After the US President demanded the resignation of Intel CEO Lip-Bu Tan just a few days ago, he managed to change his mind at a meeting a week ago. Since then, according to media reports, the company and the government have been negotiating a state investment, which would primarily benefit the construction of a huge Intel factory in the US state of Ohio. The planned commissioning of this factory has recently been delayed further and further.
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According to Bloomberg, the US government is considering using money that was supposed to go to Intel under the US Chips Act for the planned investment. In return, there are now to be shares. However, neither Intel nor the ministries involved have commented on the reports. After the report about the planned US entry caused the share price to rise significantly last week, the price fell after the possible details became public on Monday, the financial news agency explains. It only turned positive again after the deal with Softbank became known. The Japanese group is already the majority shareholder of ARM, the AI chip developer Graphcore, and Ampere Computing. The agreement now makes it the fifth-largest Intel shareholder.
Intel once dominated the semiconductor market but has been struggling for years. Nvidia has gained a leading position, particularly in the business with chips for the AI boom. Intel is also under greater pressure in its traditional business with PC processors and chips for data centers. Should the US government actually acquire a stake in Intel, this would be a further indication of how willing the White House is to blur the boundaries between government and industry. Just a few days ago, it was also announced that Nvidia and AMD will give the US a financial stake in revenues from AI chips in China. There has never been anything comparable there before.
(mho)
