Intel shares jumped by 5% in after-hours trade in New York on Monday after SoftBank announced it would be buying a $2 billion (£1.5 billion) stake in Intel, equating to $23 per share.
It follows the latest in the US government’s push for sovereign manufacturing after reports circulated that the government planned on buying a 10% equity stake, which would make the government one of Intel’s largest shareholders. It marked what some experts were calling “unprecedented,” with regards to the US government’s involvement in private sector companies.
Intel is one of the few US-based companies with the manufacturing capabilities to make the advanced chips the US increasingly views as key to its chip making strategy.
On 7 August President Trump called for Intel’s CEO Lip-Bu Tan to resign, citing concerns over links to China. Lip-Bu Tan was CEO of Cadence Design Systems during which it unlawfully exported chip design products to China between 2015 and 2021. Lip-Bu Tan wrote in a letter to the company that there had been “misinformation circulating about my past roles at Walden International and Cadence Design Systems” and that “I have always operated within the highest legal and ethical standards”.
In an announcement, Intel and SoftBank called the move part of deepening a joint commitment to investing in advanced technology and semiconductor innovation in the US.
“Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role,” said Masayoshi Son, Chairman and CEO, SoftBank Group.
“We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing US technology and manufacturing leadership,” added Lip-Bu Tan, CEO of Intel. “Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”
Experts welcomed Lip-Bu Tan’s appointment as CEO following Pat Gelsinger’s resignation in December 2024 following struggles to revive the chip maker’s fortunes. It had reportedly witnessed a $16.6 billion loss and 60% drop in share prices since Gelsinger was appointed in 2021.
However, it seems Lip-Bu Tan has inherited a considerable challenge, and has implemented cost-cutting measures. In June, the company announced it would be closing down its automotive chip making business and laying off 1,500 staff at its Hillsboro facility in Oregon.
