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- Donald Trump’s significant election victory could reshape Intel’s future.
- Trump’s policies are likely to promote domestic manufacturing in the U.S.
- He has voiced opposition to the CHIPS Act, which is crucial for Intel’s plans.
The recent electoral success of Donald Trump carries substantial consequences for Intel, a prominent player in the semiconductor industry that has been facing considerable challenges.
Once at the forefront of chip production globally, Intel is currently grappling with financial losses while implementing cost-cutting measures and exploring new strategies for recovery.
Trump’s support for tariffs and his skepticism towards the CHIPS and Science Act may significantly impact Intel’s efforts to regain its competitive edge—both positively and negatively.
Support for Domestic Manufacturing
This past Wednesday, shares of Intel surged over 7%, reaching their highest point since early August. Trump’s strong advocacy for U.S. manufacturing could present opportunities for Intel. As the largest chip manufacturer within America, with several major semiconductor plants located domestically, increased pressure to produce chips locally might lead to more business flowing toward them.
A key aspect of Intel’s recovery plan involves expanding its foundry services—producing chips on behalf of other companies—which urgently needs new clientele. Any boost from Trump’s policies would be beneficial in this regard.
An official from Intel remarked on Wednesday: “As the sole American company that designs and manufactures cutting-edge chips, we play an essential role in this sector. We look forward to collaborating with the Trump Administration on this shared goal.”
Concerns Over Opposition to CHIPS Act
However, not all news is favorable. Trump has openly criticized President Biden’s CHIPS and Science Act—a sentiment echoed by many within Intel who have taken note of his stance.
In discussions leading up to Election Day, Pat Gelsinger addressed concerns from employees regarding potential ramifications following a Trump victory—specifically whether they might miss out on approximately $8.5 billion earmarked by this legislation.
During an all-hands meeting at the company, Gelsinger emphasized that bipartisan support had facilitated the passage of this law but acknowledged that no funds have yet been disbursed under it. He recently expressed frustration during an interview with Bloomberg TV about how slowly these funds are being released despite $30 billion already invested by Intel into enhancing manufacturing capabilities.
An official spokesperson stated that they will continue engaging with Biden’s administration regarding finalizing allocations from the CHIPS Act: “The Commerce Department aims to complete this process by year-end; we remain committed to restoring U.S. leadership in semiconductor manufacturing.”
Tariffs as a Tool for Economic Growth
A more contentious aspect of Trump’s strategy involves tariffs aimed at boosting domestic production—a hallmark feature during his first term as president. The current administration has maintained similar policies; however, if re-elected, Trump may escalate these measures further over time.
“This country can become prosperous through effective tariff implementation,” he stated during a recent podcast appearance with Joe Rogan.
The global nature of semiconductor production means any tariffs imposed could disrupt supply chains critical for technology firms worldwide; most advanced chips originate from Taiwan but rely on materials sourced globally which could be impacted depending on targeted imports under Trump’s directives.
Taiwan Semiconductor Manufacturing Company (TSMC) remains pivotal here as it produces high-tech components at scale while also presenting challenges due its geographical location. “Stimulating demand directly through product innovation would yield better results than relying solely upon tariffs,” noted tech analyst Ben Thompson recently, “though such actions might compel TSMC towards establishing fabrication facilities stateside.”
Taiwan: A Critical Concern
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