The news that the US govt has quietly picked up a 10% stake in Intel landed like a thunderclap in the deep tech ecosystem. Depending on whom you ask about Trump’s semi-hostile bite of a vulnerable Intel, the stake’s either a lifeline or a handcuff. Free-market purists are aghast, muttering about government overreach. Shareholders seem jittery, showing signs that the US govt stake could drive away future customers. And within Intel itself, there’s unease about what this entails going forward.
To understand the weight of this moment, you have to trace the arc back to ex-CEO Pat Gelsinger’s resignation. His tenure, for all its evangelism about Intel’s return to glory, never quite delivered the turnaround Wall Street expected of the semiconductor giant. Intel’s foundry strategy wobbled, process node delays mounted, and rivals like TSMC and NVIDIA kept carving out more for themselves on the ground that Intel had to cede. In many ways, when Gelsinger stepped down, it wasn’t just the end of a CEO’s stint but a punctuation mark on a decade of bruised confidence at the chip maker.
Now, Washington is not just cheering from the sidelines with CHIPS Act subsidies. It’s a shareholder, and that distinction matters. A stake gives the US govt a louder voice in Intel’s boardroom, and by extension in its strategic direction. One can’t help but draw the parallels with TSMC, the pride of Taiwan. Backed at every step by its government because its survival is a matter of national security. Are we witnessing the early “TSMC-ification” of Intel?
Also read: Donald Trump wants Intel CEO to resign immediately: Here’s the backstory
The US govt’s stake in Intel can be both good and bad, if you think about it. On one hand, government support could steady Intel’s fortunes and guarantee customers that, no matter what happens, the company won’t be allowed to fail. That sort of reassurance matters when you’re talking about cutting-edge semiconductor chips for fighter jets, satellites, and nuclear submarines, not just laptops and servers. But on the other hand, Intel risks being seen less as a nimble competitor and more as a quasi-state enterprise – reliable but perhaps encumbered, the Boeing of semiconductors.
Either way, writing Intel off right now would be foolish. Beneath the surface churn, the company still commands significant assets. Its fabs in Arizona, Oregon, and Ireland are vast, irreplaceable ecosystems. While NVIDIA and AMD have made inroads, still Intel’s relationships with enterprise customers run deep. And it retains, for all its recent cuts and bruises, some of the sharpest engineering minds in the world. The shift to government-backed stewardship could actually buy Intel the most precious commodity it has lacked in recent years – time. And the opportunity to finally turn things around, with the help of the US govt.
Because make no mistake, turning Intel around isn’t about one quarter’s earnings. It’s about clawing back technological relevance over a decade-long horizon. Rival TSMC’s model thrives on ruthless specialization, staying out of chip design and focusing only on manufacturing. Intel has long insisted on doing both, and that integrated DNA, while faltering lately, still carries a logic. If the US wants a sovereign semiconductor backbone, betting on Intel’s dual identity – designer and manufacturer – makes sense.
Of course, the cultural adjustment will be messy – on top of all the layoffs happening at Intel. Engineers who once prided themselves on pure-market competition now have to reconcile with government oversight. Shareholders will balk at decisions made in Washington as much as in Santa Clara. Customers will wonder if they’re buying from a chipmaker or a proxy arm of the US govt’s industrial policy. The turbulence is real, and it won’t fade quickly.
Yet I keep circling back to history. Intel has been declared dead more times than I can count. In the ‘80s, when Japanese DRAM makers seemed unstoppable. In the early 2000s, when AMD punched far above its weight with Athlon (check out this classic ad). Even in the smartphone era, when it missed the boat on mobile chips entirely. And yet, each time, despite all the competition, Intel continues to find a way to stay relevant.
This 10% stake may feel like a low point, a tacit admission of weakness from a proud, foundational tech company. But it can just as easily be reframed as an opportunity – being America’s chip company in a time when semiconductors are a matter of heightened national security. The waters are turbulent, yes. But anyone betting on Intel’s permanent shipwreck hasn’t studied its history closely enough.
Also read: Former Intel CEO almost bought Nvidia for $20bn: Here is why it didn’t happen
