A lifeline for Intel: The company gets $2 billion equity investment amidst financial problems
After closing 2024 with losses of $18.8 billion, Intel is getting a capital injection after the Japanese SoftBank and the chipmaker signed an agreement that will guarantee $2 billion investment in Intel’s common stock.
The investment comes as a ‘lifeline’ for the chip manufacturer, which has faced problems keeping up with manufacturers like TSMC. The terms of this agreement include that SoftBank will not seek to have a seat on the board.
The deal states that SoftBank will pay $23 per Intel common stock share, down from the closing market price on Monday of $23,66. After this, SoftBank became the sixth-largest shareholder of the US company, which, according to an Intel spokesperson, acquired under 2% of Intel shares, as Reuters informed.
“Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role,” said Masayoshi Son, Chairman & CEO of SoftBank Group.
The agreement comes after reports of interest of the Trump administration to acquire 10% of Intel’s stake. According to reports, this investment would be made under the CHIPS Act. This would require over $10 billion in shares.
Under this Act, Intel has received around $10.9 billion in grants. This way, the US seeks to expand American semiconductor manufacturing and depend less on other countries.
Lip-Bu Tan, CEO of Intel, said that SoftBank “shares our commitment to advancing US technology and manufacturing leadership. Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”
Source(s)
SoftBank, Intel (financial results), Intel (CHIPS Act), Bloomberg, Intel (Image)
TOKYO, Japan and SANTA CLARA, California— SoftBank Group Corp. (TOKYO: 9984, “SoftBank”) and Intel Corporation (Nasdaq: INTC) today announced their signing of a definitive securities purchase agreement, under which SoftBank will make a $2 billion investment in Intel common stock.
The investment comes as both Intel and SoftBank deepen their commitment to investing in advanced technology and semiconductor innovation in the United States.
Masayoshi Son, Chairman & CEO of SoftBank Group Corp., said:
“Semiconductors are the foundation of every industry. For more than 50 years, Intel has been a trusted leader in innovation. This strategic investment reflects our belief that advanced semiconductor manufacturing and supply will further expand in the United States, with Intel playing a critical role.”
Lip-Bu Tan, CEO of Intel, said:
“We are very pleased to deepen our relationship with SoftBank, a company that’s at the forefront of so many areas of emerging technology and innovation and shares our commitment to advancing U.S. technology and manufacturing leadership. Masa and I have worked closely together for decades, and I appreciate the confidence he has placed in Intel with this investment.”
Under the terms of the agreement, SoftBank will pay $23 per share of Intel common stock. The transaction is subject to customary closing conditions.
SoftBank’s investment in Intel builds upon its long-term vision of enabling the AI revolution by accelerating access to advanced technologies that support digital transformation, cloud computing, and next-generation infrastructure.
