• White House economic adviser Kevin Hassett said Intel's situation was "very serious," prompting urgent government intervention.
  • The Biden administration is in advanced talks to provide additional funding under the CHIPS Act, according to people familiar with the matter.
  • Intel shares rose 3.2% in after-hours trading following the remarks, signaling investor relief.

Fragile Prospects

Kevin Hassett, director of the National Economic Council, told Bloomberg Television on Thursday that Intel Corp.'s financial and competitive position had become "very serious" in recent months, leading to intensive discussions between the chipmaker and the White House. "Without a deal, the company would have been forced into bankruptcy," Hassett said, though he declined to specify the exact terms being negotiated.

The comments underscore the high stakes for a company once synonymous with American semiconductor dominance. Intel has lost market share to rivals like Nvidia Corp. and Advanced Micro Devices Inc., while its foundry business has struggled to gain traction. The company's market value has fallen by more than half since 2020.

Government Lifeline

Negotiations have focused on expanding Intel's eligibility for grants under the 2022 CHIPS and Science Act, a person familiar with the matter said. The administration has already committed $8.5 billion in direct funding for Intel's chip fabrication projects, but Hassett indicated that more support may be needed. "We are looking at every tool in the toolbox," he said, adding that a formal announcement could come within weeks.

Industry analysts have warned that without additional capital, Intel's turnaround plan led by CEO Pat Gelsinger could stall. Gelsinger has vowed to restore Intel's manufacturing prowess and launch new products by 2025, but the company reported a net loss of $1.6 billion in the most recent quarter.

Intel declined to comment on the ongoing discussions. Attempts to reach the Treasury Department for comment were not immediately successful.

This article has been updated to include after-hours share price movement.