Should the US Government Invest in Intel?

In 1996, Andy Grove wrote in Only the Paranoid Survive:
“Most companies don’t die because they are wrong; most die because they don’t commit themselves. They fritter away their valuable resources while attempting to make a decision. The greatest danger is standing still.”

Three decades later, his warning feels eerily relevant to Intel. Once the crown jewel of U.S. semiconductor innovation, Intel is now at a turning point. Its decline has not been due to a single wrong bet, but rather years of indecision, lack of urgency, and the absence of real competition. For decades, AMD barely managed to survive as the “NOT INTEL” alternative. Today, however, AMD has become a serious competitor, while TSMC dominates advanced manufacturing.

A New Era Under Lip-Bu Tan

The turning point came in March 2025, when Lip-Bu Tan—venture capitalist, technologist, and long-time industry leader—took over as Intel’s CEO. In just four months, he began reshaping Intel, working to eliminate the culture of analysis paralysis that had built up over years. His goal is simple but critical: to restore Intel’s relevance by committing to bold actions and real competition.

Intel still has remarkable assets. One of its most significant recent breakthroughs is Back Side Power Delivery (BSPD), which the company already has implemented at its 18A process node. While other foundries will eventually follow, Intel currently leads in this area. It is a reminder that, despite recent struggles, Intel remains one of the most innovative companies in the history of semiconductors.

Politics Meets Technology

Yet technological leadership does not protect a company from political storms.

On August 6, 2025, Senator Tom Cotton sent a letter to Intel’s board questioning Tan’s alleged ties to Chinese firms, even suggesting connections to the Chinese People’s Liberation Army. These claims have been widely disputed, but they added fuel to political controversy. The very next day, former President Donald Trump demanded Tan’s resignation on Truth Social, calling him “highly conflicted.”

Tan’s response was swift and measured. In a letter to Intel employees, he reaffirmed his loyalty to Intel and the United States, avoiding political rhetoric. On August 11, he flew to Washington D.C. to meet with President Trump and presented Intel’s strategic value to the U.S. The meeting was reportedly positive, with Trump later praising Tan’s story and signaling that his administration would work closely with Intel’s leadership moving forward.

Why Intel Matters

The debate over whether the U.S. government should invest in Intel goes far beyond corporate performance. It is about national security, supply chain resilience, and technological independence.

Intel has been responsible for many of the semiconductor industry’s most important innovations over the last 50 years. It remains the only U.S.-based company capable of manufacturing at the leading edge. Losing that capability—or allowing it to weaken further—would leave the U.S. dangerously reliant on overseas foundries in Taiwan and South Korea.

Investing in Intel is not about bailing out a struggling firm. It is about investing in outcomes: ensuring the U.S. has a competitive, domestic foundry capable of supporting defense, artificial intelligence, and digital infrastructure for decades to come.

Looking Ahead

There are accusations that the recent political drama was staged for financial gain, with rumors of insider trading around the timing of Senator Cotton’s letter. Whether or not such speculation is true, the central issue remains unchanged: Intel is too strategically important to ignore.

The question now is not whether Intel deserves support, but how that support should be structured. Should it come as direct investment, tax incentives, expanded CHIPS Act funding, or partnerships with defense and research agencies? Whatever the mechanism, the U.S. cannot afford indecision.

As Andy Grove warned, standing still is the greatest danger. For Intel—and for the United States—the time to commit is now.

Source - Semiwiki