SoftBank Group has injected $2 billion into Intel, providing vital support to the struggling US chipmaker as it works on its turnaround strategy amid increasing competitive and financial pressures.
The announcement made on Monday indicates that SoftBank will become one of Intel’s top 10 shareholders, acquiring an equity stake of just under 2%. Reports from Reuters indicate SoftBank will buy shares at $23 each, slightly below Intel’s closing price on Monday of $23.66. According to data from LSEG, this investment positions SoftBank as Intel’s sixth-largest investor.
Intel, which was once a leading player in the semiconductor industry, recorded its first annual loss since 1986 earlier this year, amounting to $18.8 billion. The company has gradually lost market share to competitors like AMD in both PC and server chips, while its contract manufacturing segment has struggled to compete with Taiwan’s TSMC.
Masayoshi Son, the chief executive of SoftBank, highlighted that this investment reflects confidence in the growth of advanced semiconductor manufacturing in the United States. Additionally, it aligns with SoftBank’s wider ambitions in artificial intelligence, which encompass the $500 billion Stargate data centre initiative and a $30 billion investment in OpenAI.
According to sources familiar with the matter, the Japanese firm will not pursue a board seat at Intel nor make commitments to purchase its chips. Following the announcement, SoftBank shares fell by over 5% in Tokyo, while Intel’s stock saw a 5.6% increase in after-hours trading.
Simultaneously, the US government is reportedly contemplating acquiring an approximate 10% stake in Intel, as noted by Bloomberg, referencing a White House official and other informed sources. Such an investment could position Washington as Intel’s largest shareholder.
Discussions are ongoing regarding the potential conversion of some or all of Intel’s $10.9 billion in grants from the Chips and Science Act into equity. At the current market value, a 10% investment would be worth about $10.5 billion. To date, Intel has received $2.2 billion from its Chips Act funding.
The White House has not provided confirmation on these reports. “No deal is official until it’s announced by the administration,” spokesperson Kush Desai informed Bloomberg, while refraining from providing additional details. Intel has not issued any public statements on the situation.
The prospect of government investment follows a recent meeting between President Donald Trump and Intel CEO Lip-Bu Tan. Bloomberg reported that this meeting was prompted by Trump’s call for Tan’s resignation due to purported connections with Chinese firms, although it is understood that SoftBank’s investment decision is unrelated.
Analysts suggest that Intel’s unique position as both a chip designer and manufacturer could still allow it to compete with TSMC, provided it successfully implements its long-postponed strategies. Support from both private and public investors is deemed crucial for its recovery.
