To help Intel overcome its financial crisis, the U.S. government is not only offering financial support packages but is also considering the possibility of promoting an “unthinkable” merger between Intel and its long-time rival, AMD.
According to a report from Semafor, the U.S. Department of Commerce is actively exploring solutions to support Intel, the long-established American tech company currently facing severe financial difficulties. As the only U.S. company that both designs and manufactures advanced chips, Intel has long been considered a “national asset” and a core component of America’s strategy for self-sufficiency in semiconductor production.
With other major tech corporations like NVIDIA, Apple, AMD, and Qualcomm focusing solely on chip design and relying on overseas factories for manufacturing, Intel’s role has become even more crucial. The company serves as a strategic counterweight for the U.S. against strong competition from China in the semiconductor industry.
However, Intel’s financial situation is not very promising, as the company reported a net loss of up to $16 billion in the past quarter, primarily due to restructuring costs and asset revaluation. Nevertheless, Intel has issued a more optimistic forecast for Q4 and has recently received large orders from the U.S. Department of Defense and Amazon Web Services.
To help Intel through this challenging period, the U.S. government is considering deploying a funding package from the CHIPS Act with a total value of up to $20 billion. This support package includes an $8.5 billion grant and a low-interest loan worth $11 billion. However, the disbursement process is facing difficulties as U.S. officials require Intel to provide a specific and feasible recovery plan to ensure the effectiveness of the investment.
Alongside financial support, a merger option is also being discussed by the government and stakeholders. Among potential companies, AMD and Marvell Technology have emerged as the leading candidates for this merger. Notably, although Qualcomm and Apple are both major American tech corporations interested in reshoring production, they were not mentioned in this report. Previously, Qualcomm had shown interest, with CEO Cristiano Amon stating that the company was considering its options and would make a decision after the U.S. presidential election.
While there is no precedent for the U.S. government directly intervening in a merger between private companies, many sources indicate that the government may play an active role in encouraging a privately-led merger. This possibility is further reinforced by a statement from a U.S. Department of Commerce spokesperson: “We have confidence in Intel’s vision for manufacturing chips on American soil.”
In addition, Intel is placing high hopes on its new 18A chip line, expected to launch in 2025, as a solution to help the company improve its competitive position in the global semiconductor market.
