On September 27th, Caixin News Agency reported that Intel is working hard to save itself. In addition to the major business adjustments announced in mid month, the company has also recently been rumored to be acquired by Qualcomm.
However, most Wall Street analysts believe that Intel still prefers to conduct its own business and is unlikely to accept Qualcomm's acquisition offer. According to the latest news, the US government is discussing providing Intel with $8.5 billion in financial appropriations and $11 billion in loans, which may provide Intel with an important capital boost.
According to insiders, the White House may finalize this funding plan before the end of the year, and negotiations have entered a later stage. Any acquisition of all or part of Intel's business could disrupt delicate negotiations.
Another person familiar with Intel pointed out that due to the proximity to the US election, the White House may be eager to implement this project, and it would not be surprising if the subsidy is determined before the November election.
This will be the largest single subsidy granted by the US chip bill, and the US government hopes to support local chip companies through a series of financial aid while attracting overseas investors. This bill is also the Biden administration's proudest political achievement.
Mutually beneficial transaction
In March of this year, Biden visited Intel's factory in Arizona, USA, and vigorously promoted this temporary financing agreement. The White House stated that the agreement will bring 3000 manufacturing jobs and 7000 construction jobs to Arizona, which is a key swing state in the election.
In addition, as the uncrowned king of the US chip industry for many years, Intel also has a special representative significance for the United States. US Secretary of Commerce Raimondo once referred to Intel as the champion semiconductor company. TechInsights' G Dan Hutcheson pointed out that part of the purpose of the chip bill is also to ensure that companies such as Intel are US companies supported by the US government.
As a gesture of goodwill towards the US government, Intel emphasized in its transition statement this month that it will not suspend all investments in the US, but will cancel its expansion in Germany, Poland, and Malaysia.
If Intel can successfully obtain this funding from the White House, it may take another gamble in its chip foundry business, trying to turn a bicycle into a motorcycle instead of splitting or selling it due to financial pressure.
Intel itself still has high hopes for its continuously losing chip foundry business. Earlier this month, Intel announced that its state-of-the-art 18A chip manufacturing team has secured a major customer from Amazon. This week, Intel has once again increased its investment and released two AI chips, which, although slightly weaker in performance than Nvidia's H100, have a significant cost advantage.
This represents that Intel still has the ambition to compete with the world's top contract manufacturers, and this ambition is currently in urgent need of funding for its battery life.