Trump administration’s deal is structured to prevent Intel from selling foundry unit

The Trump administration has structured a deal with Intel that restricts the company’s ability to spin off or sell its foundry business unit, which manufactures custom chips for external customers. Intel’s CFO David Zinsner revealed that the agreement includes a five-year warrant allowing the U.S. government to acquire an additional 5% stake in Intel at $20 per share if Intel’s ownership in the foundry unit falls below 51%. This provision effectively penalizes Intel for divesting the foundry business, aligning with the government’s goal of maintaining domestic chip manufacturing capacity amid growing reliance on offshore producers like Taiwan Semiconductor Manufacturing Company (TSMC). The foundry unit has been financially underperforming, reporting losses in the second quarter and generating pressure from analysts, board members, and investors to spin it off. Despite these challenges, the deal incentivizes Intel to retain the unit, reflecting the administration’s strategic priority to bolster U.S. semiconductor production under the CHIPS and Science Act. Intel recently received remaining grant