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White House may give Intel a huge gift

admin — Sun, 28 Sep 2025 05:17:43 +0000

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Lip-Bu Tan was appointed Intel CEO in March and given the difficult task of saving the company. He’s been working on it and doing everything possible to fix the situation.

He trimmed the workforce and laid out a plan for the company to end the year with only 75,000 employees.

Tan also secured many investments, beginning with SoftBank’s $2 billion stake. The US Government plans to speed up the payment of $8.9 billion in funding already pledged to the company, and Nvidia will invest $5 billion.

However, these investments arguably aren’t enough, because the company faces one major problem.

New rules imposed by the US government might give a boost to Intel’s Foundries.

Image source: picture alliance/Getty Images

Intel desperately needs customers for its foundries

According to the Bloomberg sources, Intel (INTC) is in talks with Apple. The company is trying to secure an investment from Apple and is discussing how it can work more closely together.

Assuming Bloomberg sources are correct, and knowing that Apple no longer relies on Intel for its CPUs, this working closely together undoubtedly refers to Intel trying to get Apple to use its foundries to produce chips instead of Taiwan Semiconductor Manufacturing Company (TSMC).

This brings us to the crux of the matter: Intel’s foundries.

Its fabs are bleeding money, losing more than $13 billion in the last four quarters alone, and Intel is desperate to find customers.

Operating semiconductor factories is very expensive. Research and development for better manufacturing processes costs billions. A semiconductor manufacturing process is usually referred to as a node. When a company develops a new “node,” it usually needs additional work before it can be used with good yields.

Intel currently manufactures silicon for its Core 200-series Arrow Lake and Lunar Lake CPUs at TSMC. The company plans to make its Core 300-series Panther Lake line in its own fabs using its 18A node, reported Tom’s Hardware

Intel ran into issues with its 18A node yields due to performance-related changes made to Panther Lake CPUs.

According to Tom’s Hardware, Intel CFO David Zinsner said regarding 18A yields:

We would have liked to have gotten yield stabilized sooner, but as we were adjusting performance, yield tends to be what gets impacted. We are in a good — really good place on the performance, and now we are making kind of steady incremental improvement on yields on 18A. And we’ll take those learnings to help us on 14A.

Following Panther Lake, Intel is supposed to launch the Nova Lake line of CPUs, but it is rumored that it may have to use TSMC’s N2 node instead of its own 18A.

The combination of rumors and admitted difficulties in launching Panther Lake can’t be good for attracting customers. Worse, Intel may end up pausing or discontinuing its 14A node if it doesn’t secure a significant external customer, as stated in its 10-Q filing with the SEC.

US Government regulation may help Intel

According to the Wall Street Journal sources, the US government is considering a plan to cut down the US’s reliance on semiconductors made abroad, hoping to increase domestic manufacturing.

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The new policy would require semiconductor companies to manufacture the same number of chips in the US as their customers import from overseas producers. Companies would need to sustain a 1:1 ratio over time to avoid paying an approximately 100% tariff.

On the surface, this could attract fabless semiconductor companies to Intel for manufacturing. Intel’s shares closed 4.44% higher following the news of the rumored plan.

However, changing nodes is not a cakewalk. As we’ve seen with Panther Lake, even tweaks on a chip designed for a specific node aren’t easy, let alone switching from one manufacturer’s node to a different one. It can take a long time to redesign the chip.

Furthermore, TSMC has fabs in Arizona. For Intel, everything hinges on the success of Panther and Nova Lake lines. If they get good yields and performance, they will have a much easier time convincing other companies that they have a good node.

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Weekly Wrap: Market optimistic, Intel, Oklo and Paramount emerge triumphant

admin — Sat, 20 Sep 2025 23:53:54 +0000

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The market reacted positively to the Fed’s announcement of a quarter-point rate cut. With a bullish run this week, the three major indices — the S&P 500, Nasdaq Composite, and Dow Jones Industrial Average — closed this Friday at new 52-week highs.

The tech sector wavered slightly closer to the closing bell on Friday after President Donald Trump signed an executive order raising the H1-B visa fees to $100,000. But overall, the market rallied high this week, with several new deals pushing stocks to newer highs.

The S&P 500 was up 1.22%, the Nasdaq climbed 2.21%, and the DJIA was up 1.05% this week. It was a favorable week for the small-cap index Russell 2000, which was up 2.16% this week, even after it closed 0.77% lower on Friday. It also traded at a 52-week high on Friday’s early trading hours.

Intel was up 47.5% year-to-date.

Image source: Sokolow/picture alliance via Getty Images

The Fed’s 25 basis-point rate cut and the prospect of two more cuts by the year’s end have provided significant optimism to the market.

Tony Pasquariello, global head of hedge fund coverage at Goldman Sachs Global Banking & Markets, weighed in on the Fed’s decision, noting a favorable investor dynamic.

In the latest episode of The Markets Podcast, he explained that “When the Fed is cutting into a cyclical upswing, typically the outcomes are favorable.”

He added, “In the absence of recession, markets tend to go up. When the Fed is adding stimulus on top of that, typically the wind is blowing in a favorable direction for the bulls.”

Friday’s market confirmed this sentiment, as all major indices reached new all-time highs. Investors remain optimistic for the coming week ahead, particularly for the housing market.

For years, owning a house has been unfavorable for buyers due to high borrowing costs, and the possibility of lower mortgage rates has captivated investor sentiment.

However, reduced mortgages are not directly dependent on the Fed’s benchmark rates. Instead, they are more significantly influenced by 10-year Treasury bonds.

While markets opened strong on Monday, with new highs for the Nasdaq and S&P 500, they turned bleak on Tuesday, the first day of the Federal Open Market Committee Meeting (FOMC).

The markets, which were primarily flat on Wednesday, quickly reacted to the Fed announcement, leading to a better day for the Russell 2000.

On Thursday and Friday, the market reacted optimistically to the rate cuts and stocks racked up fresh highs.

In addition to the first rate cut in nine months, the Nvidia-Intel deal was notable in the week, leading to Intel share value achieving a 52-week high on Thursday.

After uncertainty over the takeover bid, regained interest led Paramount Skydance to a 52-week high on Friday. Oklo, an advanced nuclear technology company, reaped the benefits of the U.S. and U.K. nuclear deal and was up 28.8% at closing on Friday.

Intel rides high on Nvidia deal

After Nvidia announced a $5 billion investment in Intel’s common stock, Intel stock surged to a 52-week high on Thursday at $32.38 and gained 22.8% this week.

It also gave Nvidia some respite after continuously trading low, and it was up 3% after the news was released.

The two tech giants will jointly develop multiple generations of custom data center and PC products to accelerate workloads and deliver cutting-edge solutions to customers.

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“This historic collaboration tightly couples NVIDIA’s AI and accelerated computing stack with Intel’s CPUs and the vast x86 ecosystem — a fusion of two world-class platforms. Together, we will expand our ecosystems and lay the foundation for the next era of computing,” says Jenseng Huang, Founder and CEO of NVIDIA.

After this, Nvidia became one of Intel’s largest shareholders, with a 4% stake in the chip maker.

Benchmark raised Intel’s price target to $43 and upgraded it to Buy from Hold, as noted at The Fly. It believes this deal represents a “significant fundamental tipping point” in Intel’s competitive positioning.

Paramount Skydance is up again

After Paramount Skydance announced a takeover bid for Warner Bros. Discovery, both media conglomerates’ stocks soared, but instability soon led to a turnaround. However, Paramount became a top S&P performer on Friday, up 5.8% at closing after renewed interest.

CNBC’s David Faber reported that Paramount Skydance could offer Warner Bros. $22-$24 per share, with at least 70% in cash. The news of backing from Larry Ellison, co-founder of Oracle, also led to higher stocks for both companies at Friday’s closing.

David Ellison, CEO of Paramount Skydance, has been eyeing to close the deal that would bring Warner Bros. Discovery out of its debt, which has troubled it since its merger in 2022.

Nuclear Technology company emerges as a top achiever

Oklo, based in California, soared 28.8% after it announced plans to build and operate a fuel recycling facility in Tennessee. It is the first step in Oklo’s larger plan to create an advanced fuel center.

This nuclear technology company’s new 52-week high, Oklo, was $136.5, a far cry from its lowest of $6.4 in September 2024. Gaining 536.98% year-to-date, Oklo plans to invest $1.68 billion at the Tennessee center, which will be the first of its kind nuclear fuel recycling center and also aims to create more than 800 jobs.

It benefited greatly from the recent multibillion-pound nuclear deal between the U.S. and the U.K., which aims to expand nuclear power across the nations.

The Atlantic Partnership for Advanced Nuclear Energy will help next-generation nuclear companies like Oklo expand in the U.K. and strengthen Oklo’s position as a key player in the clean energy transition.

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Trump administration’s deal is structured to prevent Intel from selling foundry unit

admin — Fri, 29 Aug 2025 01:35:12 +0000

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The Trump administration seems intent on controlling Intel’s ability to make key business decisions around its floundering foundry business unit.

According to reporting from the Financial Times, at a Deutsche Bank conference on Thursday, Intel’s CFO David Zinsner shared new details about the company’s recent deal with the Trump administration, which gave the U.S. government a 10% equity stake.

The deal was structured in a way to penalize Intel if it spins out its foundry business unit, which makes custom chips for outside customers, within the next few years.

Last week’s deal included a five-year warrant that would allow the U.S. government to take an additional 5% of Intel, at $20 a share, if the company held less than 51% equity in its foundry business. Zinsner said he expects that warrant to expire.

“I think from the government’s perspective, they were aligned with that; they didn’t want to see us take the business and spin it off or sell it to somebody,” he said.

Zinsner added that the company received $5.7 billion in cash on Wednesday, as a result of last week’s deal, according to Reuters. (That cash comes from the remaining grants previously awarded, but not yet paid, to Intel under the U.S. CHIPS and Science Act.)

White House press secretary Karoline Leavitt told reporters today that the deal was still being ironed out.

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Intel declined to comment on the deal beyond Zinsner’s remarks.

This deal structure is clearly a testament to the Trump administration’s desire to bring more chip manufacturing to the United States as many players in the industry turn to Taiwan Semiconductor Manufacturing Company’s offshore manufacturing instead.

But this warrant also forces Intel to keep a business unit that is losing money. Intel Foundry reported an operating income loss of $3.1 billion during the second quarter and has been a source of strife for the semiconductor business.

There have been calls from analysts, board members, and investors alike to spin out the struggling foundry unit, which looked like it might actually happen last fall, before Intel Foundry’s architect, former CEO Pat Gelsinger, retired suddenly in December.

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How once-iconic Intel fell into a 20-year decline

admin — Sun, 10 Aug 2025 09:11:07 +0000

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What happens when a U.S. president tries to take down the CEO of a publicly traded company?

We’re about to find out in a bizarre case that could alter not just the career of a CEO but also a one-time corporate jewel of American enterprise, a global industry, and what a previous Commerce Secretary has called “the most important piece of hardware in the 21^st century.”

The drama began on the morning of August 7, when President Trump posted a short statement on Truth Social: “The CEO of INTEL is highly CONFLICTED and must resign, immediately. There is no other solution to this problem. Thank you for your attention to this problem!” The post suddenly directed attention to a letter Senator Tom Cotton (R.-Ark.) had sent to Intel’s board chairman two days earlier. It said Intel CEO Lip-Bu Tan “reportedly controls dozens of Chinese companies,” and a multinational company had recently pleaded guilty to violating U.S. export controls “under Mr. Tan’s tenure,” among other accusations. By day’s end, Tan had sent a letter to Intel employees saying, “There has been a lot of misinformation circulating about my past roles…. I have always operated within the highest legal and ethical standards,” and Intel had told the media, “We look forward to our continued engagement with the Administration.” The stock fell 5% on an up day for the market, another blow to Intel shareholders who had hoped—finally—that things might have hit bottom.

How Intel lost its edge

It would have been a one-day story if it weren’t about Intel, once the world’s biggest, most advanced maker of computer chips.

It’s decline began some 20 years ago, when the company made multiple acquisitions, many of which were in telecommunications and wireless technology. In concept, that made great sense. But acquiring businesses is a skill of its own, and David Yoffie, a Harvard Business School professor who was on Intel’s board of directors at the time, told Fortune “100% of those acquisitions failed. We spent $12 billion, and the return was zero or negative.”

Intel also tried unsuccessfully to grasp the mammoth cell phone opportunity. The company understood the opportunity and was supplying chips for the highly popular BlackBerry phone. The chips were designed by Arm, a British firm that designs chips but doesn’t manufacture them. Intel understandably preferred to make phone chips with its own architecture, known as x86. The company decided to stop making Arm chips and to create an x86 chip for cell phones—in retrospect, “a major strategic error,” says Yoffie. “The plan was that we would have a competitive product within a year, and we ended up not having a competitive product within a decade,” he recalls. “It wasn’t that we missed it. It was that we screwed it up.”

As years went by, simple poor management crept in. Intel kept missing new-chip deadlines and lost market share. The company gave up on smartphone chips. CEOs were replaced, but the production troubles continued until, by 2021, for the first time in Intel’s existence, its chips were two generations behind competitors’. Those competitors were Taiwan’s TSMC and South Korea’s Samsung.

In crisis mode, Intel’s board brought back Pat Gelsinger, an engineer who had spent 30 years at Intel before leaving for 11 years to be a high-level executive at EMC and then CEO of VMware. As Intel’s CEO he announced an extraordinarily ambitious and expensive plan to reclaim the company’s stature as the world leader in chip technology. In February of this year, as the stock price fell, the board fired him and brought in Tan.

Despite it all, Intel is still crucially important because it’s the only U.S. company with the technology and know-how to make leading-edge chips in America–though it hasn’t actually done that in eight years. At the highest level of geopolitics, primacy in chips is central to power, and for the past eight years the world’s fastest, most valuable chips have been made only in Taiwan and South Korea. That’s why Congress passed the CHIPS and Science Act with bipartisan majorities. It became law in 2022 and starting last year has sent billions of dollars to chipmakers, American and foreign, building new factories and other chip infrastructure in the U.S. Intel was allotted the most subsidies, about $8 billion plus loans, though the company hasn’t received most of the money, which is disbursed based on reaching project milestones.

It’s as if the money came just a little too late. “Intel had a great opportunity,” says Gauvar Gupta, an analyst at the Gartner research firm. “They were getting all these subsidies from the government. But I think they just could not execute.” At that critical moment, poor performance was costly. “A year and a half ago there was still positivity with Intel,” says Alvin Nguyen, an analyst at the Forrester research firm. “Now, not as much. The negativity that’s hit them, it’s just snowballed.”

Now suppose Tan were to step down as CEO. “Who wants that job?” asks Stacy Rasgon, a longtime tech analyst at Bernstein. He observes in a recent note that Tan “doesn’t ‘need’ to run Intel (he’s very wealthy and has a lot of other things to occupy his time)…. He clearly wants to do what is best for Intel…” But it’s unclear if resigning would be good or bad for the company, “especially with Trump’s crosshairs on his back.” Rasgon, speaking to Fortune, asks, “How do you attract somebody else into that spot?”

Getting Tan wasn’t easy. “The board took a while in finding the new CEO when [previous boss] Pat Gelsinger left,” says Gupta. “It took a long time to find a candidate willing to take control and lead the company in a direction.”

Nonetheless, Yoffie and three other former Intel directors argued in a statement to Fortune for a new company, a new board, and a new CEO, spinning off Intel’s manufacturing arm into an independent company to secure America’s chipmaking dominance.

Trump’s post puts himself at the center of a crucial conundrum for national security. Global dominance requires a reliable source of leading-edge chips. That’s why Commerce Secretary Gina Raimondo in 2024 said they’re “the most important piece of hardware….” The world’s largest producer of leading-edge chips by far, Taiwan’s TSMC, is building two fabs in Arizona, subsidized by the CHIPS Act, with more planned. “You can make the argument that the more capacity builds in Arizona, maybe the less we need Intel,” says Rasgon. But TSMC isn’t an American firm, and Nguyen says “the best technology from TSMC is definitely not coming to the U.S. at this time.”

Which leaves Intel. “They’re the only American company that can do it,” says Rasgon. “But Intel still has to prove they could deliver. They haven’t proven that.” Trump has shined a spotlight on the once-iconic company. But identifying problems and solving them are two very different matters, something Intel-watchers have known for going on two decades.

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