Trump Administration Deal Bars Intel from Offloading Foundry Business

The Trump administration appears determined to exert influence over Intel’s strategic decisions regarding its underperforming foundry business unit.

According to a Financial Times report from a Deutsche Bank conference on Thursday, Intel CFO David Zinsner revealed new details about the company’s recent agreement with the Trump administration, which granted the U.S. government a 10% equity stake.

The arrangement includes provisions to penalize Intel if it spins off its foundry business—which produces custom chips for external clients—within the next several years.

Last week’s deal featured a five-year warrant enabling the U.S. government to acquire an additional 5% stake in Intel at $20 per share, should the company’s ownership in its foundry operations fall below 51%. Zinsner indicated he expects that warrant to expire unused.

“From the government’s perspective, they shared our view; they did not want to see us spin off or sell the business to another party,” he stated.

Zinsner added that Intel received $5.7 billion in cash on Wednesday as part of the agreement, Reuters reported. (These funds represent remaining grants previously allocated to Intel under the U.S. CHIPS and Science Act that had not yet been disbursed.)

White House press secretary Karoline Leavitt informed reporters today that final details of the deal are still being finalized.

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Intel declined to comment beyond Zinsner’s statements.

This deal structure clearly reflects the Trump administration’s push to strengthen domestic chip manufacturing, as many industry players increasingly rely on Taiwan Semiconductor Manufacturing Company’s offshore production.

However, the warrant also compels Intel to maintain a business unit that is currently unprofitable. Intel Foundry reported a $3.1 billion operating loss in the second quarter and has been a challenging segment for the semiconductor company.

Analysts, board members, and investors have all advocated for spinning off the struggling foundry unit—a move that seemed likely last autumn, before Intel Foundry’s architect, former CEO Pat Gelsinger, unexpectedly retired in December.