CHENNAI: Global semiconductor major Intel is all set to secure two major sources of fresh financial support — from the US government and from Japanese investment group SoftBank — as it pushes ahead with plans to revive its technology leadership and expand semiconductor manufacturing in the US.
On Monday, SoftBank Group announced its plans to buy $2 billion worth of Intel shares at $23 per share. This deal makes SoftBank one of Intel’s top ten shareholders, though it will not take a board seat or commit to buying Intel chips. For SoftBank, the investment is both a bet on the future of artificial intelligence infrastructure and a value play, as Intel’s stock has been trading at depressed levels while the company works through a turnaround.
Separately, Bloomberg reported on Tuesday that, the US government has recently committed significant funds to Intel under the country's CHIPS and Science Act.
It may be recalled that in November 2024, Washington had finalised up to $7.87 billion in grants to help Intel build and expand factories in Arizona, New Mexico, Ohio, and Oregon. Intel will also be eligible for federal loans of up to $11 billion and a 25% investment tax credit on qualifying expenses. As the report says these grants will be converted into the government's stake in the company.
In September 2024, the Commerce Department announced up to $3 billion in “Secure Enclave” funding to support defense-grade manufacturing. This program ensures a trusted supply of cutting-edge chips for U.S. military and national security systems.
There are also reports that the Trump administration is considering converting part of Intel’s funding into a direct equity stake, though discussions are still underway.
Why it matters
According to investment strategists and technology experts, these two new investments in the U.S. technology major carry significant strategic importance. For SoftBank, the deal strengthens its exposure to semiconductors and the fast-growing AI sector. For the US government, the investments are part of a broader push to bring chipmaking back onshore, reduce dependence on Asian suppliers, and guarantee secure production for defense applications. Together, these moves also help de-risk the enormous costs of building advanced chip fabs by combining public funds with private capital.
While, Intel is trying to regain its footing in the global semiconductor race and position itself as a leading foundry for both commercial clients and government needs. With billions in new support from Washington and a major global investor betting on its turnaround, Intel has gained fresh financial backing — but the company still faces the challenge of delivering on its technology and execution promises.
Intel, once the undisputed leader in microprocessor technology, has struggled in recent years because of delays in advancing its manufacturing processes. It fell behind rivals like Taiwan Semiconductor Manufacturing Co. (TSMC) and Samsung, which moved faster to adopt newer, smaller process nodes. This gap meant that Intel’s chips often arrived later to market, with lower efficiency and performance compared to competitors.
On the execution side, Intel has repeatedly missed product timelines—for example, its 10-nanometer rollout was delayed by several years. At the same time, competitors like AMD, which uses TSMC’s advanced foundry services, gained market share in both PC and data center chips.
Additionally, Intel is attempting a strategic transformation into a foundry business, building factories to produce chips for external clients. This is an ambitious shift that requires not only catching up technologically but also proving that customers can rely on Intel for timely, cost-effective, and leading-edge manufacturing — areas where trust has been shaken by past execution missteps.
In short, Intel must simultaneously regain technological leadership and rebuild credibility, which is why investors and policymakers see execution as its biggest challenge, say technology experts.