The Trump administration converted Intel's CHIPS Act grants into a 10% government ownership stake. It's a rare move that makes the federal government Intel's largest shareholder - basically admitting that American chip manufacturing is too critical to leave to the free market.
Intel needed the help. They've been getting demolished by TSMC in Taiwan and Samsung in Korea for years. While Intel fumbled mobile chips and missed the AI boom entirely, Asian fabs locked up the cutting-edge manufacturing. Now Intel's trying to catch up while TSMC controls 90% of advanced chip production.
Why This Is About National Security
The nightmare scenario keeping defense officials awake: China invades Taiwan, TSMC's fabs go offline, and suddenly American weapons systems need chips from potentially hostile suppliers. Or maybe we just can't get any advanced chips at all.
"Companies that can actually physically manufacture those advanced chips are very strategically important because there's just not many of them," Jennifer Lind from Dartmouth told NPR. "Intel is the only one in the U.S."
That's the reality. Nvidia designs brilliant AI chips, but TSMC makes them in Taiwan. AMD builds solid processors, but they're also manufactured in Taiwan. Intel is the only company in America that actually fabricates cutting-edge chips on American soil - and they've been struggling to compete for years.
Intel's Technical Catastrophe
Intel fucked up their 10nm process so bad it took six years to fix. They promised 10nm in 2015, shipped broken versions in 2019, and only got it working properly in 2021. Meanwhile TSMC shipped working 7nm in 2018 and 5nm in 2020.
The 14nm nightmare was worse. Intel's 14+++++nm (yes, five pluses) became a meme because they couldn't shrink their process. TSMC and Samsung lapped them twice while Intel kept refreshing 2014 technology.
Michael Malone wrote the Intel history book and puts it bluntly: Intel owned the chip world, then fell behind a generation and "can almost never catch up."
Current reality: TSMC ships 3nm while Intel's still fixing 4nm. Their fabs cost $20+ billion each and they're still behind on process technology. Government money won't fix engineering problems that took a decade to create.
Taxpayers Bail Out Intel Management's Failures
The government gets 10% ownership but zero voting rights. Intel management - the same people who missed mobile, AI, and advanced manufacturing - still make all the decisions. Taxpayers take the risk, Intel executives keep their bonuses.
This is the worst possible deal structure. Intel shareholders get rich, taxpayers take the loss if this fails. The government needed voting control to fire the people who caused this mess in the first place.
Intel's current leadership has overseen a decade of strategic failures. Their GPU attempt flopped. Their autonomous driving unit died. Their phone processor business never existed. Now they get billions in bailout money with no accountability.
Jennifer Lind warns that government intervention brings "inefficiency, politicization and favoritism." But Intel's private management already brought inefficiency - just expensive, failed inefficiency.