SOFTBANK Group has agreed to invest $2 billion in embattled chip maker Intel, a boost from the private sector that coincides with a government rescue effort.
Trump administration officials are discussing taking a 10% stake
in Intel in a bid to revive the company’s fortunes and bolster semiconductor
manufacturing in the U.S., according to people briefed on the talks.
On Monday, Intel announced that SoftBank would buy $2 billion
worth of Intel stock at $23 per share, a slight discount to the company’s
Monday closing price of $23.66. The investment equates to around 87 million
shares and gives the Japanese firm ownership of about 2% of the company, making
it Intel’s sixth-largest shareholder, according to S&P Global Market
Intelligence. Investors appeared to interpret SoftBank’s move as a vote of
confidence: The chip maker’s shares popped 4.5% in after-hours trading after
closing down 3.7% for the day.
Additional investment is helpful for Intel, but the company needs
customers for its chip design and fabrication businesses to get back on track,
industry analysts say. Intel posted a net loss of $2.9 billion in the second
quarter. The company has said it is seeking large commitments from customers to
move ahead with manufacturing of its latest generation of
artificial-intelligence chips.