Why the U.S. government is not the savior Intel needs

The Trump administration recently announced a controversial plan to convert government grants originally intended for Intel into a 10% equity stake in the company. This move, unprecedented and legally uncertain, aims to support Intel but does not address the company’s core challenges, particularly its struggling Intel Foundry division. Intel Foundry, responsible for manufacturing custom semiconductors for external customers, has failed to secure major contracts and has operated at a loss, contributing to layoffs and internal leadership changes. Industry experts argue that Intel’s problems stem less from funding shortages and more from a flawed customer service approach and internal culture that prioritizes manufacturing over client relationships. Intel itself has acknowledged risks associated with the government equity deal, including dilution of existing shareholders’ stakes and potential negative impacts on its international business, which accounts for the majority of its revenue. The involvement of the U.S. government as a partial owner could complicate Intel’s relationships with foreign customers amid ongoing trade tensions. While some analysts view the government’s intervention as a positive sign of