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Recently, David Zinser, Chief Financial Officer (CFO) of U.S. chip giant Intel, confirmed that Intel has received a $570 million capital injection from the U.S. government. This fund is a key part of the U.S. government’s plan to take a stake in Intel. At the same time, Zinser revealed the true intention of the U.S. government’s stake in an public meeting: to prevent Intel from selling its troubled chip foundry business. The White House, meanwhile, stated that the relevant details are still being finalized.

Intel Confirms Receipt of $570 Million Capital Injection

David Zinsner stated on Thursday (August 28th) local time that Intel received a $5.7 billion capital injection from the U.S. government on Wednesday evening. This sum is part of the U.S. government’s plan to take a stake in Intel, which was announced last Friday.

Under the plan, the U.S. government will invest $8.9 billion to acquire a 9.9% stake in Intel. Upon completion of the transaction, the U.S. government will become one of Intel’s largest shareholders (click to review previous coverage). Combined with the $2.2 billion in subsidies Intel has already received, the total investment from the U.S. government in Intel will reach $11.1 billion. Zinsner also indicated that Intel may seek external investment opportunities for its foundry business to support business expansion.

White House Press Secretary Karoline Leavitt responded on Thursday that the transaction between Intel and the government “is still being finalized by the U.S. Department of Commerce.” Leavitt emphasized, “Everything is still being refined. Everything is still under discussion,” reflecting that the details of the agreement have not yet been finalized.

In a corporate filing released on Monday, Intel warned that the agreement could trigger “negative reactions” from investors, employees, customers, suppliers, or other parties, including potential lawsuits or public scrutiny.

Executive Reveals Government’s Purpose for Taking Stake: Prevent Sale of Foundry Business
At a Deutsche Bank conference on Thursday, David Zinsner elaborated on the true purpose of the U.S. government’s stake in Intel. He stated that the Trump administration’s investment is aimed at preventing Intel from selling its chip foundry business (i.e., the wafer foundry division). The agreement reached by the U.S. government last week not only includes an $8.9 billion equity investment but also attaches a five-year warrant: if Intel’s ownership stake in its foundry business falls below 51%, the government has the right to acquire an additional 5% stake at $20 per share, increasing its ownership from 10% to 15%.

Zinsner explained, “From the government’s perspective, they are unified on this—they don’t want us to spin off this business or sell it to someone else.” He added that the warrant can be seen as “a form of check-and-balance mechanism to prevent us from moving in a direction the government doesn’t want us to go.” Zinsner believes it is unlikely that Intel will reduce its ownership in the foundry business to below 50%, so he expects the warrant to “eventually expire.” Meanwhile, he mentioned that direct government ownership may cause potential customers to view Intel from a “different perspective,” which will help secure new orders.

This revelation highlights the predicament facing Intel’s foundry business. The business has continued to incur losses in recent years, with a loss of $13 billion last year. Intel struggles to compete with rivals such as TSMC and Samsung, and has previously considered spinning off or selling this division—companies including Qualcomm have also expressed interest in acquiring it.

Zinsner pointed out that the future of Intel’s foundry business depends on its ability to win major customers for its next-generation 14A process technology; otherwise, it may withdraw from the business entirely. He emphasized that Intel is focusing on securing major customers next year and pledged to maintain “financial discipline” in technology development, as using the technology solely for internal purposes without attracting external customers will not generate “appropriate” shareholder returns.