Trump Backs Intel with Surprise Stake; World's Largest Ohio Chip Plant Resurrected

TradingKey - According to multiple authoritative media outlets on August 14, the Trump administration is in negotiations with chip giant Intel Corporation, considering providing critical support for Intel's domestic chip manufacturing expansion through a government equity stake.

Following the news, Intel shares surged 7.38% at Wednesday’s close, extending gains into after-hours trading with an additional 4.48% rise, returning the company’s market capitalization to $104.4 billion.

Source: Google Finance

Sources indicate that the agreement currently under negotiation could help solidify Intel's plans for a large chip manufacturing base in Ohio. Intel had previously pledged to make this facility the "largest chip manufacturing plant in the world"; however, the project has faced multiple delays since its announcement, with progress falling significantly short of expectations.

At this point, key details regarding the specific stakes that the U.S. government may hold and the nature of its investment remain unclear. If this plan comes to fruition, it could not only alleviate Intel's current financial strains but also signal that Pat Gelsinger will continue to serve as Intel's CEO.

Previously, Trump publicly criticized Gelsinger as a "national security threat" and even called for his resignation; however, following a meeting at the White House, Trump's stance underwent a dramatic reversal, praising Gelsinger’s "achievements and remarkable journey."

Regarding market rumors, a White House spokesperson maintained a cautious approach, emphasizing that "any discussions of hypothetical transactions are speculative." Likewise, Intel declined to comment on negotiation specifics; instead, it stated that it “looks forward to continuing cooperation with the Trump administration on shared priorities,” while also asserting it “will not comment on rumors or speculation.”

As a former giant in the semiconductor industry, Intel has faced fierce competition in recent years and continues to lose market share and technological leadership, finding itself in dire straits.

Former CEO Pat Gelsinger viewed the expansion of the Ohio factory as a cornerstone of the company's revival strategy. However, ongoing financial difficulties have put this project at risk. Earlier this year, Intel announced it would delay this initiative until the 2030s and indicated in July that it would further slow down construction plans for its Ohio facility.

Since taking over as CEO in March of this year, Gelsinger has shifted focus toward financial restructuring by implementing aggressive cost-cutting measures—including laying off 15% of staff (planning to reduce total employees from approximately 109,800 to 75,000), canceling European plant projects, and slowing down wafer fabrication plans in Ohio.