"The Trump administration made an unprecedented, and confusing, move last week when it announced plans to convert money Intel was supposed to receive through Joe Biden-era government grant programs into a 10% equity stake.While it remains unclear if converting those government grants into equity is even possible - that's up for debate - it's even less obvious how this move will solve Intel's biggest problem, its waffling foundry business."
"Kevin Cassidy, a managing director at Rosenblatt Securities, told TechCrunch he doesn't see how this deal will solve Intel's problems. Intel Foundry doesn't need money to solve its issues, he said, instead it needs to change its approach to its customers. "They didn't understand customer service," Cassidy said of Intel Foundry's struggles to sign customers. "They have always manufactured internally, the manufacturing group was king. It's hard to be a customer service-focused group when you think you know better.""
The administration announced plans to convert Biden-era grant funds intended for Intel into a 10% equity stake in the company. Legal and procedural questions remain about whether government grants can be converted into equity. Intel Foundry has struggled to win external contracts, reported a $3.1 billion operating loss in Q2, and has led to thousands of layoffs. Leadership changes and board resignations reflect differing views on turnaround strategy. Analysts argue the foundry's problems stem from customer-relations and strategic approach rather than lack of funding. Intel acknowledged risks from the deal in a recent SEC filing.
Read at TechCrunch
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