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

The Trump administration seems to control the ability of Intel to make important business decisions around the struggling foundry business unit.

CFO David Zinner of Intel shared new details about the recent deal of the company with the Trump administration, which gave the US government a stock of 10%, according to a Deutsche Bank conference on Thursday, according to Reporting of the Financial Times.

The deal was structured in a way to punish Intel when it spreads its foundry business unit, which makes tailor -made chips for external customers within a few years.

Last week’s deal included an order of five years that would enable the US government to take another 5% of Intel, by $ 20 per share, if the company had less than 51% equity in its foundry activities. Zinner said he expects that order will expire.

“I think they were coordinated from the government’s perspective; they did not want to see us hire and distract or sell it to someone,” said Zinter.

Zinner added that the company received $ 5.7 billion cash On Wednesday, as a result of last week’s deal, according to Reuters. (That money comes from the remaining fairs that have been awarded earlier, but not yet paid, to Intel under the US Chips and Science Act.)

White House Pers Secretary Karoline Leavitt told Reporters today that the deal was still ironed.

Intel refused to comment on the deal outside the comments of Zinner.

This deal structure is clearly a proof of the wish of the Trump administration to bring more chip production to the United States, since many industry players turn to the offshoring production of Taiwan Semiconductor Manufacturing Company (TSMC) instead.

But this order also forces Intel to maintain a business unit that loses money. Intel Foundry reported an operational loss of income of $ 3.1 billion in the second quarter and has been a source of struggle for the semiconductor activities.

There have been phone calls from analysts, board members. And investors to spin the wrestling foundry, which looked as if it could happen last fall before the architect of Intel Foundry, former CEO Pat Gelsinger, suddenly retired in December.