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🇰🇷 South Korea /Economy & Trade

Trump administration steers US toward state capitalism with Intel stake

From Hankyoreh · () Korean

Translated from Korean, summarized and contextualized by DistantNews.

At a glance

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  • The Trump administration has taken a more interventionist approach to the semiconductor industry, converting subsidies into an equity stake in Intel.
  • This move, making the US government Intel's largest shareholder, signals a departure from free-market principles toward state capitalism.
  • The administration is actively coordinating partnerships for Intel, aiming to boost US chipmaking self-sufficiency to 50% by the end of Trump's term.

The US government under President Donald Trump has acquired a 10% equity stake in Intel, becoming the cash-strapped chipmaker's largest shareholder. This $8.9 billion investment, converting previously announced subsidies, marks a significant shift from the free-market advocacy traditionally associated with the US, prompting comparisons to Chinese-style state capitalism.

Following the government's move, other major tech firms have announced collaborations with Intel. Nvidia committed $5 billion for investment and to use Intel's CPUs, while SpaceX founder Elon Musk agreed to incorporate Intel technology into his planned semiconductor plant. Apple also announced a partnership to design and build its chips in America, according to Trump's social media.

Analysts suggest these corporate decisions are coordinated by the Trump administration, with Commerce Secretary Howard Lutnick reportedly pressuring tech leaders to work with Intel. This level of direct government involvement in corporate decision-making, beyond the subsidy-focused approach of the Biden administration's CHIPS and Science Act, is seen as a departure from traditional American capitalism.

Concerns exist that such direct government intervention in resource distribution could lead to inefficiencies and market distortions, deviating from the principle of leaving such matters to the market, except in emergency situations. Trump has set an ambitious goal of increasing US chipmaking self-sufficiency from 10% to 50% within his term, a target reminiscent of China's "Made in China 2025" plan.

finally, Apple has agreed to work with Intel to design and build its Chips in America.

— Donald TrumpPresident Trump's social media post announcing Apple's partnership with Intel.
DistantNews Editorial

Originally published by Hankyoreh in Korean. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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