Trump's "Rescue" of Intel: The Industry's Dilemma and Future Challenges Behind a Political Injection

US President Donald Trump injected nearly $9 billion into Intel in exchange for a 9.9% stake, a move the market viewed as a "rescue" for the chip giant. However, this amount of funding is far from enough to address Intel's core problems, and the revival of its chip foundry business still faces numerous difficulties. This injection of funds is more like a political and industrial game, reflecting the deep-seated contradictions and future challenges of the US chip industry.

The Trump administration, using funds from the CHIPS Act as a base, converted the original subsidies into equity. While ostensibly a "generous aid" to Intel, it actually provided no substantial additional funding. Intel had expected to receive the Act's funds for free, but now it has been paid with equity. More importantly, the $8.9 billion injection falls far short of Intel's actual needs. Analyst Patrick Moorhead noted that Intel needs $40 billion to develop its next-generation 14A technology, and its existing funds can only partially fill the gap, making it unable to support its massive manufacturing expansion and technological research and development.

Trump's decision to invest in Intel is driven by multiple political considerations. First, Intel's main factories are located in Ohio, a key Trump base and a key focus for the 2026 Senate elections. By investing in Intel, Trump aims to consolidate local voter support and build momentum for the election. Second, the capital injection is partially funded by high tariffs on the semiconductor industry, which can reach up to three times the original tariff. This "tax-to-support-enterprise" model highlights the protectionist nature of Trump's industrial policy. While the government's shareholding is passive, it strengthens Washington's implicit control over Intel on issues like national security and export licensing, signaling a shift in US industrial policy from indirect support to direct intervention, tinged with state capitalism.

The short-term benefits of Trump's capital injection are clear: Intel's stock price has risen, and the capital provided has alleviated pressure. However, in the long term, government intervention could become a double-edged sword. First, the shareholding makes it easier for the government to exert pressure, for example, forcing design companies like Nvidia and Qualcomm to collaborate with Intel as a condition for export licenses. If Intel's technology lags behind TSMC, forced collaboration would reduce the competitiveness of US chip products, waste resources, and ultimately harm the entire industry ecosystem. Secondly, state capital intervention may weaken companies' drive for innovation and trigger "big company syndrome"—inefficiency, rising costs, and reliance on policy rather than market drivers. Patrick Moorhead warned, "Long-term government support will lead to insufficient innovation. Intel needs to become an independent, cutting-edge foundry, not a puppet of policy."

Trump's capital injection has failed to fundamentally resolve Intel's problems, and its revival still requires internal breakthroughs. Technically, Intel must accelerate the development of advanced process technologies like 14A to narrow the gap with TSMC and rebuild customer trust through in-depth collaboration with ecosystem partners like ARM. Financially, it needs to optimize its cost structure, reduce losses, and achieve break-even in its foundry business. At the same time, a comprehensive restructuring of the US chip industry is imminent. The government's role should focus on infrastructure support and ecosystem development, rather than direct intervention through shareholding.

Trump's capital injection into Intel is more of a combination of political theater and industrial emergency response. On the surface, the capital injection alleviated the short-term crisis, and the rising stock price boosted market confidence. However, underlying issues such as technological lag, insufficient foundry competitiveness, and financial pressures remain unresolved. The $8.9 billion "lifeline" is merely a stopgap measure and cannot support Intel's return to prominence. True redemption lies in Intel's own transformation: overcoming technological bottlenecks, earning market trust, and rebuilding its foundry competitiveness. The future of the US chip industry requires transcending political manipulation, returning to the essence of innovation, and striking a balance between global cooperation and independent breakthroughs.