US President is at it again! The Trump administration is gearing up to get a majority stake in the Intel Corporation. According to a report by news agency Bloomberg that quotes officials from the White House and people aware of the matter US Govt will proceed with the deals soon. This development can be seen as another attempt by the Trump administration to safeguard industries important from a national security perspective.
The decision, if taken, comes against the backdrop of US President Trump constantly criticising Intel Corporation CEO Mr. Lip-Bu Tan and asking him to step down from the position. Trump and his fellow Republican politicians have alleged that Mr. Tan is alarmingly involved with Chinese semiconductor companies selling Industry secrets. Mr. Tom Cotton, who is a Republican Senator, even wrote a letter to the Intel Board Chairman asking questions and making serious allegations.
Allegations against the Intel CEO
According to a news report from Reuters, Mr. Tan has invested money in Chinese chipset manufacturing companies. The amount of these investments is estimated to be about 200 million dollars. These investments were reportedly made around 2012-2014, before taking the position at Intel. Moreover, an industry insider claimed that Chinese public records still link Mr. Tan to Chinese companies, although the investments were already phased out. This raises questions about his involvement. According to the Republican Senator, Mr. Tom, the Intel Corporation did not investigate Mr. Tan's past involvement and links to Chinese companies. Also, he raised questions about Tan being included in a national programme known as Secure Enclave, which is a government programme. The primary objective behind this is to prevent the use of the US chipset supply chain system from use in defence industries globally. Lastly, Senator enquired about Mr. Tan's involvement in Chinese Chip-set manufacturing companies.
Intel Stake Buyout
The Trump administration is planning to formulate a deal through which the government buys the 10 per cent stake in the Chipset manufacturing company. This stake is reportedly set to be a controlling one, which basically entails that the Trump administration will become the largest shareholder in the organisation. Additionally, this means that the Trump Administration will make major decisions related to the company, including expansion strategies and chipset sales.
SoftBank Stake Buyout
The process of acquiring a stake in Intel Corp could be transforming the Chips Act grants given to Intel as equity stakes. This means the government is buying stakes in the company by calling the grants received by Intel under a national programme as equity payments. This is according to a White House Official who was aware about this deal. Moreover, the official said that Softbank Corporation was also interested in buying a stake at Intel Corporation too. This was confirmed by the SoftBank Corporation recently when it said it's buying 2 billion dollars worth of shares in Intel Corporation.
Summing up everything we know so far it is to be seen whether the control that Trump is planning to get on Intel will benefit the company. Since the financials of the company are not in a good position, and to be honest, in a dire position. Intel is among the major tech firms laying off people a mass scale, also it's dominance in the PC chip manufacturing sector is being challenged.