US officials consider government intervention if Intel cannot get its finances in order

We've seen this movie before: It's been a while since we've heard nan phrase, "Too large to fail." While nan US authorities has learned to debar that connection because of its antagonistic connotations, that is not stopping it from considering moving nan aforesaid end-game play from 2008 – utilizing taxpayer-funded subsidies to support a ample corp afloat. This clip around, it's Intel.

Amid increasing concerns complete Intel's caller financial struggles, apical US policymakers are discreetly weighing contingency plans to support nan company, which remains cardinal to America's technological ambitions. The troubled institution is trying to rate successful connected nan precocious passed CHIPS Act, but Intel activity fears nan process is taking excessively long. Semafor notes that nan largest US-based spot shaper is expected to person billions successful authorities assistance done nan Act. Yet, discussions person begun connected whether further involution mightiness beryllium necessary.

Last week brought immoderate bully news for investors arsenic Intel turned successful a better-than-expected quarterly outlook. However, national officials and members of Congress, including Senator Mark Warner, a salient advocator of nan CHIPS Act, are reportedly exploring options should Intel's financial stableness proceed to falter. The company's caller cost-cutting measures, which included a dividend suspension and plans to trim 16,500 jobs, awesome deeper issues. To make matters worse, in installments agencies person downgraded Intel, raising its borrowing costs and generating concerns successful Washington.

"We've seen this movie before. Years ago, a struggling AMD divided disconnected its manufacturing capacity into Global Foundries."
– Former Intel CEO Craig Barrett

"We person outlined a clear strategy that we are executing pinch rigor, and nan beardown operational capacity we delivered successful Q3 demonstrates important advancement against our plan," an Intel spokesperson said. "Intel is nan only American institution that designs and manufactures leading-edge chips and is playing a captious domiciled to alteration a globally competitory semiconductor ecosystem successful nan US."

Intel's domiciled arsenic a imaginable "national champion" successful nan semiconductor abstraction has taken connected heightened significance. Unlike companies for illustration Nvidia, which trust connected third-party manufacturers successful Asia, Intel has ever produced chips successful its US-based fabrication facilities. In ray of China's power complete Taiwan, wherever TSMC produces galore of nan world's cutting-edge chips, silicon proviso chains person go a strategical privilege for economical and nationalist information reasons.

One imaginable remedy floated by policymakers is encouraging a merger of Intel's creation section pinch rivals for illustration AMD, Samsung, Marvell, aliases Qualcomm. Intel was precocious mulling complete this option. However, immoderate fearfulness this attack could reflector past failures, specified arsenic AMD's spinoff of its manufacturing limb into GlobalFoundries. Former Intel CEO Craig Barrett precocious voiced skepticism complete a breakup, informing it could undermine Intel's R&D capabilities.

"We've seen this movie before. Years ago, a struggling AMD divided disconnected its manufacturing capacity into Global Foundries," Barrett recalls. "Pundits applauded nan divided astatine nan time. A decade later, AMD is doing good utilizing TSMC, while Global Foundries has little, if any, differentiated technology. Global Foundries conscionable didn't person capable investigation and improvement budget, and pinch constricted accumulation and revenue, struggled to support up pinch marketplace leaders."

While Intel has resisted immoderate efforts astatine a merger, it mightiness not person a prime arsenic lawmakers wish to debar different authorities (read: taxpayer) bailout for illustration nan ones successful nan car manufacture successful 2008. Leadership would alternatively spot Intel bail itself retired and are judge to use unit successful that direction. However, Congress has not wholly taken a authorities subsidy scheme disconnected nan table.

Intel CEO Pat Gelsinger said that contempt a $16.6 cardinal nett nonaccomplishment owed to restructuring expenses, including layoffs, nan institution still expects to debut its caller 18A spot adjacent twelvemonth – a motorboat seen arsenic important to closing nan spread pinch TSMC. Whether further authorities support aliases further firm restructuring will travel Washington's consequence whitethorn yet trial its expertise to equilibrium innovation, nationalist security, and free-market principles.