AsianFin -- The Trump administration has tied Intel’s hands on its struggling foundry business, structuring a deal that discourages the U.S. chipmaker from spinning off or selling the unit in the coming years.
Intel Chief Financial Officer David Zinsner disclosed the terms at a Deutsche Bank conference on Thursday, following last week’s agreement that gave Washington a 10% equity stake in the company.
As part of the deal, the government secured a five-year warrant allowing it to acquire an additional 5% of Intel at $20 a share if the company’s stake in its foundry arm drops below 51%. Zinsner said he expects the warrant to expire unused.
“From the government’s perspective, they didn’t want to see us take the business and spin it off or sell it to somebody,” Zinsner said.
Intel’s foundry division manufactures custom chips for external clients and has been a key piece of U.S. efforts to secure domestic semiconductor production.
Explore more exclusive insights at nextfin.ai.
