Intel shares pop on report US govt mulling investment

Intel shares jumped in pre-market trade after a report that the US government is mulling taking a stake in the chipmaker.

The talks follow a meeting this week between President Donald Trump and Intel boss Lip-Bu Tan, just days after the authoritarian leader called for Tan's removal over his ties to China.

The deal would help shore up Intel’s planned factory hub in Ohio, Bloomberg reported, citing unnamed sources. Intel last month warned it may exit chip manufacturing without external customers and plans to slow construction on its Ohio factories.

Hargreaves Lansdown analyst Matt Britzman said the strategic rationale "makes sense from President Trump’s standpoint, as securing domestic chipmaking capacity is a key priority".

"For Intel, what a difference a week makes, as Trump pivots from calling for CEO Lip-Bu’s resignation due to alleged China conflicts to a much friendlier stance. Clearly, the meeting between the two went well, and direct government support could provide a much-needed boost to support Intel’s struggling onshore foundry business."

Earlier this week, the government unveiled a deal where it would take 15% of revenues from chipmakers Nvidia and Advanced Micro Devices from their chip sales to China. Last month, the defence department also announced it would take a $400m preferred stake in the US rare earth producer MP Materials.

Reporting by Frank Prenesti for Sharecast.com