① Intel has reached a $7.86 billion subsidy agreement with the US government, but strict restrictions must be met Intel announced on Wednesday that the US government has required it not to sell its shares in the chip manufacturing division at will The US Department of Commerce stated that it is in talks with all subsidy recipients regarding a change of control clause.
Although Intel has reached a $7.86 billion subsidy agreement with the US government, according to the company, the conditions that need to be met for this agreement are very complex.
On Wednesday, Intel stated that the US government requires Intel not to sell its shares in its chip manufacturing division at will during the period of receiving chip subsidies.
According to documents provided by Intel, if the Intel chip foundry is split into a new private enterprise, subsidy regulations require Intel to hold at least 50.1% of the shares in the new company; If the Intel foundry becomes a publicly traded company and Intel is not the largest shareholder, the new company can only sell up to 35% of its shares to any individual shareholder.
The document also states that any change in control of Intel may require seeking permission from the US Department of Commerce. Only by meeting these conditions can Intel obtain funding from the US government to continue its $90 billion chip factory project in Arizona, New Mexico, Ohio, and Oregon.
In September, Intel CEO Pat Gelsinger expressed the idea of splitting the chip manufacturing business into a subsidiary and was willing to accept external investors to invest in the department.
Subsequently, there were rumors in the market that Qualcomm hoped to acquire Intel to strengthen its business line, but this plan seemed to be close to being aborted due to political factors and antitrust concerns.
Intel did not comment on the condition of restricting departmental sales, while the US Department of Commerce, which is in charge of chip subsidy distribution, stated that the Biden administration is negotiating control change terms with all subsidy recipients.
This seems to indicate that the Biden administration has further tightened the subsidy conditions for Intel, not only reducing the originally promised subsidy scale, but also showing signs of government interference in corporate business decisions.
Previously, the Biden administration planned to provide up to $8.5 billion in subsidies to Intel.
This may also be related to Intel's financial difficulties that have not seen improvement for a long time. The company recently reported its largest quarterly loss in its 56 year history, which is a blow to the Biden administration's ambition to revitalize the US chip manufacturing industry, as Intel has always been the most valued "American heritage" in the plan.