Intel has spent much of the last year struggling, and one way to tell is all the reports that other major tech companies are seeking to potentially purchase the longtime chip maker. We’ve seen claims that tech giants like Apple have considered taking over Intel to Qualcomm mulling over an Intel purchase.
Apparently, it’s enough that the United States government has taken notice as claimed in a new report from Semafor.
With Intel reporting over $16 billion in losses for this past quarter, Semafor reports that the US Commerce Department is looking at multiple avenues to bail the American company out.
CHIPS Act … with a catch
One iteration would involve a law called the CHIPS Act funding to give Intel a cash injection, which may not actually right the ship. The CHIPS act is meant to help American tech companies that manufacture components compete with China via cash infusions. Currently, Intel is slated to receive over $20 billion in grants and low-interest loans via CHIPS.
Reportedly, Intel hasn’t received any of that money due to concerns from U.S. officials that the company needs to present a “viable” turnaround plan. Supposedly, policymakers do not have the stomach for a bailout a la 2008, where the government took a direct stake in ailing companies.
Sources indicated to Semafor that initial talks among Congress people and Commerce department bureaucrats are because the government views Intel as a strategically important company that acts as a “counterweight to China” in the semiconductor space. Currently, most chips are manufactured in China. Unlike Nvidia and Qualcomm, both American companies, Intel actually produces its own chips, rather than outsourcing that work to “fabs” in places like Korea and Taiwan.
An Intel spokesperson told Semafor, “Intel is the only American company that designs and manufactures leading-edge chips and is playing a critical role to enable a globally competitive semiconductor ecosystem in the US.”
Last week, Intel reported the huge net loss, which the company blamed on writedowns and “restructuring charges.” Though the company did have a rosier outlook for Q4.
What about AMD?
One option that has been floated is a merger with AMD, who Intel just teamed up with on an x86 council to protect the architecture from a recent surge of ARM-based chips like Qualcomm’s Snapdragon Elite.
Marvell is another tech company that was named, which is based out of California. Surprisingly, Apple and Qualcomm were not mentioned despite both being American companies and increasingly looking to bring manufacturing in-house.
The U.S. government, as far as we are aware, has never forced a merger between two companies. Though, it’s not out of the realm of possibility as suggested by sources that the government would encourage a private sector-led merger between Intel and AMD or Marvell. As far as we are aware there isn’t any indication from either company that they are interested in taking on Intel’s portfolio and foundries.
Despite the doom and gloom, Intel’s future does appear to look a bit brighter in the short term. The company has a massive order from the U.S. Department of Defense and Amazon Web Services. Intel is also expecting the launch of the 18A chip, coming in 2025.
“We have confidence in Intel’s overall vision for manufacturing chips in the United States,” a Commerce Department spokesperson told Semafor.
