Intel’s shares have risen 4.6% in premarket trading following a Bloomberg News report that the Trump administration was in discussions with the company about a potential US government investment.
The talks reportedly followed a meeting earlier this week between President Donald Trump and Intel CEO, Lip-Bu Tan, only days after Trump publicly called for Tan’s resignation over alleged China-linked investments.
The development comes as Intel confirmed the cancellation of two major semiconductor projects in Europe: a multibillion-dollar chip fabrication plant in Magdeburg, Germany, and a €4.6 billion assembly and test site near WrocÅ‚aw, Poland. The move marks a significant retreat from the company’s European expansion plans and undermines the EU’s drive for semiconductor self-sufficiency.
In a staff memo, Tan described the decision as a necessary correction: “Over the past several years, the company invested too much, too soon – without adequate demand. We must correct our course.”
Intel’s second-quarter results revealed a net loss of $2.9 billion on revenue of $12.9 billion, an 81% year-on-year drop. As part of a broader restructuring plan, the company will cut 15% of its workforce.
The restructuring aims to simplify operations, cut costs, and return Intel to what Tan described as its “engineering roots”. Measures include reducing capital spending, flattening management layers, removing administrative burdens, and requiring hybrid employees to work on-site four days per week from 1st September 2025.
Tan told employees: “We are seen as too slow, too complex, and too set in our ways – and we need to change.”
Intel is also reviewing its manufacturing and artificial intelligence (AI) strategies, with plans to improve the performance of Intel Foundry Services, attract major external customers such as Microsoft and Amazon, and develop AI products beyond data centre applications.
According to sources cited by Reuters, Tan is considering a shift towards an annual AI chip release cycle, although a competitive new architecture may not be ready before 2027. The strategy is seen as a continuation, but with sharper focus, of former CEO Pat Gelsinger’s efforts to transform Intel into a major contract chip manufacturer alongside TSMC.
Industry analysts have noted that winning at least two high-volume foundry customers will be critical to the plan’s success. NVIDIA, Broadcom, and AMD are all said to be evaluating Intel’s production capabilities.
