Intel, once a leader in the microchip industry, is now facing serious difficulties. The company has lost its technological edge to Taiwan’s TSMC, prompting the US government to consider direct financial support. According to The Wall Street Journal, Donald Trump’s team is negotiating with Intel about potential government investment, driven by the company’s lag in technology and the threat of the US losing independent chip production capabilities.
Intel’s share price has dropped sharply in recent years. Recent news of possible government support led to a 7% jump in stock value, offering investors hope. However, financial aid alone won’t address core issues such as strategic market lag and increasing competition. Intel has already received billions in subsidies from the ChipS Act, but these funds have not resulted in industry breakthroughs.
The main problem is that the market sees little future for Intel without drastic change. Development costs have risen, but breakthroughs remain elusive. Intel’s new 18a processors are mainly used internally, with little interest from third-party clients. The company foresees significant losses this year and continues to delay new production facilities.
Competition from Samsung and TSMC weakens Intel’s position. Samsung recently secured major contracts, including with Tesla, strengthening its US market presence. The US remains highly dependent on Taiwanese chip production, driving efforts to support local manufacturers.
State intervention is a double-edged sword. While it provides resources, it can restrict Intel’s flexibility and lead to greater politicization of decision-making. There are discussions about the government mandating companies like Nvidia and AMD to use Intel’s production, which could affect market competition and product quality.
Intel’s situation has outgrown typical market competition. It is now a matter of US national security and technological independence, but excessive state involvement threatens efficiency across the US semiconductor sector.
