Why the US government is not the savior Intel needs
The headlines may sound bold, but why the US government is not the savior Intel needs has become painfully clear. Last week, the Trump administration announced plans to convert money Intel was expecting through Biden-era grant programs into a 10% equity stake.
Image Credits:Alex Wroblewski/Bloomberg / Getty Images
The move was unprecedented and confusing. It also raises serious questions: Will this government intervention actually fix Intel’s deeper problems—or just buy the company more time?
A risky government bet on Intel
The idea of converting federal grants into equity ownership is not only unusual, but also unclear in its legality. Even if the move goes through, it won’t solve Intel’s most pressing challenge: its failing foundry business.
Intel Foundry, created to manufacture semiconductors for outside companies, has struggled to gain traction. Despite ambitious goals, it has lost major contracts—Reuters reports Sony walked away—and the division continues to burn billions.
The foundry business is bleeding cash
In Q2 alone, Intel Foundry reported a $3.1 billion operating loss. Thousands of employees have been laid off in 2025, with the foundry unit hit especially hard. Instead of becoming a growth engine, the business has turned into a financial sinkhole.
Boardroom tensions have also surfaced. Lip-Bu Tan, a key executive, resigned from Intel’s board in 2024 partly due to disagreements over the foundry strategy. Even after his short-lived appointment as CEO in 2025, the turnaround remains elusive.
Money isn’t the answer
Industry experts argue that cash injections—even in the form of government equity—won’t magically solve Intel’s problems. Kevin Cassidy, managing director at Rosenblatt Securities, told TechCrunch that Intel’s issues run much deeper.
“Intel doesn’t need money,” Cassidy said. “They need a culture shift. The foundry has never understood customer service. Internally, manufacturing was king. That doesn’t work when you’re supposed to be serving outside clients.”
Why Intel’s future can’t rely on Washington
This is the real reason why the US government is not the savior Intel needs. Government support can provide breathing room, but it cannot fix broken strategy, culture, or execution. For Intel to survive in the ultra-competitive semiconductor market, it must rethink how it operates—especially its relationship with customers.
Until that shift happens, no amount of taxpayer-backed funding will save Intel from itself.
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