TMTPOST -- U.S. President Donald Trump   could tap   into a legislation   aimed at   boosting   American semiconductor   industry   to fund his aggressive   efforts   bail   Intel Corporation   out.

Credit：China Central Television

The Trump administration is considering   using at least part   of funds from the   CHIPS and Science Act   of 2022 ( CHIPS Act )   for Intel in exchange for a stake in the   57-year   old   chipmaker,   Bloomberg   on Friday   cited   people   familiar with the matter.   It   was said   that the government ’ s talks   were   still in early stages and   other options could be under consideration.

The   report   indicated possible options include   converting some or all of Intel ’ s existing CHIPS Act   grants into equity, allocating new funding from a broader pool, and   combining Chips Act money with other financing streams.   It noted that   the source of funding remains in   discussion, hinting the   administration   may eventually decide   to   take advantage of other sources.  

The government is   seeking to   quickly deploy   dormant   CHIPS   Act funding to sectors   it considers critical to U.S. national security, per the report.    

Signed into law in August 2022, the   CHIPS   Act   allocated $53 billion in federal incentives for domestic semiconductor manufacturing and research and development   ( R&D ) , of which $39 billion is set aside for a financial assistance program — also called the CHIPS for America Fund — administered by the U.S. Department of Commerce to build new and expand existing semiconductor facilities. Companies are also eligible for a 25%   tax credit.

While U.S. and foreign companies with facilities in the United States are eligible for the CHIPS Act, Intel   was already deemed as the biggest beneficiary of the federal incentives.   The company under the act was awarded $7.9 billion in grants for commercial semiconductor manufacturing and as much as an additional $3 billion for the Pentagon ’ s Secure Enclave program. It also   has   an   option   to   draw   an   $11 billion   loan   under the act.

The White House, Commerce Department and Intel didn ’ t comment on the report, but   investors   seemed   welcomed the news   since Intel   shares rose as much as 7.5%   at midday.   The stock closed   2.9%   higher,   bringing the rally   following   reported possible   U.S. government   stake in to 10.5%.

The Trump administration on   Thursday was reported to   be   in talks with Intel to have the U.S.   government take a stake in   the company, and the deal,   if reached, would help re-boost Intel ’ s   long-delayed   factory hub in Ohio.

Neither Intel nor the Trump administration   confirmed these reports.   "We look forward to continuing our work with the Trump administration to advance these shared priorities, but we are not going to comment on rumors or speculation," an Intel representative   said   in a statement.  

The spokesperson   repeated the   pledge Intel   made   last week,   saying the company   is "deeply committed to supporting President Trump ’ s efforts to strengthen U.S.   technology and manufacturing leadership."

"Discussion about hypothetical deals should be regarded as speculation unless officially announced by the Administration," White House spokesman Kush Desai said in a statement.

Government intervention in Intel is "essential" to protect U.S. national security,   tech   analyst Gil Luria said   in a CNBC interview   on Friday ."We ’ re all capitalists,"   said   Luria, head of technology research at D.A. Davidson "We don ’ t want government to intervene and own private enterprise, but this is national security."

But Paul Argenti, professor of management and corporate communication at the Tuck School of Business at Dartmouth College, cautioned the risks from   the potential   government capital injection.  

"It ’ s tricky to think about how this could work, and it is unprecedented in terms of the marriage of politics and private enterprise" said Argenti.   "Semiconductors are a really strategic asset, there ’ s no question about that," he added. "But government as a shareholder brings real governance risks."