Intel announced on Wednesday that its $7.86 billion subsidy deal with the U.S. government comes with restrictions on the company's ability to divest stakes in its chipmaking unit if it becomes an independent entity. The subsidy, part of the $39 billion funding under the CHIPS Act, aims to bolster domestic semiconductor manufacturing and includes other major players like Taiwan Semiconductor Manufacturing Co.
The announcement follows Intel CEO Pat Gelsinger's statement in September about plans to restructure its chip manufacturing operations into a subsidiary, named Intel Foundry, and explore external investments for the unit. However, the terms of the subsidy require Intel to retain at least a 50.1% ownership stake in Intel Foundry if it spins off into a private entity. Additionally, if Intel Foundry goes public and Intel is no longer its largest shareholder, the company could sell no more than 35% of the unit to a single shareholder without triggering regulatory provisions tied to changes in control.
These restrictions are part of the U.S. Commerce Department's agreements with direct grant recipients to maintain oversight and ensure domestic control of semiconductor manufacturing capacity. A Commerce Department representative confirmed ongoing negotiations with grant recipients regarding change-in-control provisions. Intel has not yet commented on the specifics of these restrictions.
Compliance with these terms is essential for Intel to continue its $90 billion worth of projects across Arizona, New Mexico, Ohio, and Oregon, where it aims to manufacture advanced semiconductor chips. According to the filing, any potential changes to Intel Foundry's ownership or structure would require prior approval from the U.S. Department of Commerce. This underscores the federal government’s focus on safeguarding U.S. semiconductor manufacturing capabilities as part of its broader strategy to secure the supply chain and enhance technological competitiveness.