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Korean technology giant Samsung is reportedly considering making an equity investment in Intel as part of President Trump's efforts to shore up support for the embattled American chip manufacturer. Intel is appearing to play a key role in the Trump administration's efforts to shore up domestic chip production, as it is the only domestic company capable of operating at the high end of the chip production spectrum.
Samsung Hopes To Demonstrate Commitment To Trump's Efforts Of Rebuilding US Chip Production By Investing In Intel, Says Report
Intel's shares jumped earlier this week after Japanese investment giant Softbank announced that it would invest $2 billion into the struggling firm. After the initial enthusiasm in Intel's shares earlier this year after CEO Lip-Bu Tan took over, investor sentiment has been jittery, as while they have bought the stock on rumors of a foundry spinoff, they have also sold it over worries about slow demand for leading-edge processes and potential billion-dollar write-offs.
The stock closed 7% lower yesterday amidst a broader tech selloff and a day after reports indicated that the Trump administration could convert Intel's CHIPS Act awards into equity. These reports generated worries about equity dilution for a firm whose earnings power is already under question due to costly chip production agreements.
After Softbank's investment, a report in the Korean press suggests that Samsung is also considering taking a stake in Intel. Through the investment, Samsung hopes to win the Trump administration's favor and establish a closer partnership with Intel.
According to the industry insiders, Samsung has reviewed plans for an Intel investment since they offer legitimacy and practical benefits. The Trump administration has taken a hard-hitting approach to spur investment in the US, with Samsung's larger contract chip manufacturing rival TSMC having committed an additional $100 billion investment in the US earlier this year through an announcement made at the White House.
However, investing in Intel is only one of the options Samsung is considering. The sources add that Samsung could also partner with the American packaging company Amkor. Semiconductor packaging has emerged as a key sub-sector in the AI era since the chips have to withstand extreme operating conditions. While TSMC has established in-house chip packaging facilities, Samsung lags on this front and could benefit by bringing Amkor on board.
The Korean firm scored a major win this year after it announced a chip production agreement with Tesla. This deal, valued at $16.5 billion, will see Samsung manufacture Tesla's next-generation artificial intelligence chips in Texas, with Tesla CEO Elon Musk personally overseeing the efforts.
About the author: Ramish is a seasoned technology writer and editor with more than a decade of experience. He specializes in semiconductor fabrication and market analysis. With a background in finance and supply chain management - via his bachelors in Finance and a micromasters in supply chain management from MIT - Ramish combines financial rigor with deep industry insight to deliver accurate and authoritative coverage.
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