Intel's stock price surged as the U.S. government may take a stake, and Trump accelerates the "support strategy for strategic industries."

The U.S. government is considering taking a stake in chip giant Intel.

According to media reports, on Monday, Trump proposed a plan to help the struggling U.S. chip manufacturer through equity acquisition after meeting with Intel CEO Lip-Bu Chen.

Notably, just a week before this meeting, Trump had called for Lip-Bu Chen's resignation. However, after the meeting, Trump praised Lip-Bu Chen and stated that the government would negotiate with him.

Reports indicate that a key factor driving government intervention in Intel is Trump's desire to revive the company's factory project in Ohio.

According to insiders, there are related proposals. However, the individual warned that details are still being formulated and negotiations could break down.

Boosted by this news, Intel's stock price surged over 4% on Thursday.

Chips, Steel, Rare Earths... The Trump Administration Accelerates Support for "Strategic Industries"

This move further reflects the Trump administration's interventionist strategy towards U.S. companies, especially those in strategic industries.

Earlier this year, the Trump administration obtained a so-called "Golden Share" when approving Japan's Nippon Steel's acquisition of U.S. Steel, granting Washington veto power over key decisions.

Last month, the U.S. Department of Defense announced it would acquire preferred shares of the little-known U.S. rare earth producer MP Materials Corp. for $400 million, becoming the company's largest shareholder.

Analysts point out that this move overturns the traditional view held by investors, analysts, industry executives, and even senior government officials regarding the relationship between private enterprises and the government.

Government Capital Injection May Alleviate Financial Pressure

Capital injection from the government could help restart Intel's growth momentum and alleviate the pressure the company faces in cutting costs and layoffs.

Previously, Intel's chip manufacturing business has struggled in competition with TSMC, accumulating losses of billions of dollars. Last month, Lip-Bu Chen stated that the company would abandon its paused manufacturing projects in Germany and Poland and slow down the construction pace of the Ohio factory to address the losses.

In 2022, Intel stated that the Ohio factory was expected to become the world's largest semiconductor facility, but the timeline has been repeatedly delayed. In March of this year, Lip-Bu Chen took over as CEO from Pat Gelsinger, who was ousted by the board after heavily investing in manufacturing.

Regarding the negotiations, White House spokesperson Kush Desai responded:

"Unless the government makes a formal announcement, discussions about hypothetical transactions should be regarded as speculation."

Intel declined to comment but stated in a release:

"Intel is firmly committed to supporting President Trump’s efforts to strengthen U.S. technology and manufacturing leadership. We look forward to continuing to work with the Trump administration."