Commerce Secretary Raimondo aids Intel in boosting U.S. manufacturing.

• Recently, Gina Raimondo, the Commerce Secretary, has discussed the advantages of Intel and U.S. chip manufacturing with investors.
• Pat Gelsinger, the CEO of Intel, recently met with her and is working to put the chipmaker back on track.
• This year, Intel's stock price has dropped over 60%, causing the company significant struggles.

The company has lost 60% of its value this year in the booming artificial intelligence market while aggressively building out fabs in the U.S. It is now seeking assistance from Commerce Secretary Gina Raimondo.

In a recent meeting with Raimondo, Intel CEO Pat Gelsinger expressed frustration about the heavy dependence of U.S. companies on Taiwan Semiconductor Manufacturing Company (TSMC), the world's largest contract chipmaker.

Raimondo met with public market investors to emphasize the significance of chip manufacturing in the U.S., given the increasing geopolitical tensions surrounding Taiwan, according to sources who requested anonymity due to the confidential nature of the discussions. Raimondo aimed to persuade shareholders in companies such as Nvidia and AMD to recognize the economic advantages of having a U.S. foundry that can produce AI chips, the sources added.

Intel is currently constructing facilities in four U.S. states as part of its efforts to transition into a foundry business, producing chips for other manufacturers. In 2022, the Biden administration granted Intel up to $8.5 billion in CHIPS Act funding, and the company could potentially receive an additional $11 billion in loans from the legislation.

A senior government official informed CNBC that disbursements of funds are anticipated to occur by the end of the year.

Intel is struggling in the microprocessor market, losing share in its core PC and data center business to competitors such as AMD, while Nvidia dominates the AI market.

Sources report that Intel's foundry progress has been hindered by delays, while TSMC, which is constructing a foundry in Arizona, has encountered comparable difficulties.

Neither the U.S. Commerce Department nor a spokesperson for Intel provided a comment.

Intel's design and foundry businesses may be separated, as discussed in a meeting this week, according to sources. Intel CFO David Zinsner stated at a conference last week that splitting the businesses would make sense.

"Zinsner stated that he could predict the creation of more separation between the two businesses, emphasizing the importance of customers recognizing that distinction."

Intel's earnings report last month revealed lower-than-expected profit and revenue, prompting a 15% workforce reduction. Following the report, the stock experienced its worst day in 50 years, dropping to its lowest point in over a decade.

TSMC, a major manufacturer for several tech giants including Nvidia, AMD, Apple, Amazon, Google, and Broadcom, is also a significant concern for the U.S. chip industry due to the rising possibility of a China invasion of Taiwan.

At the Goldman Sachs Communicopia conference on Wednesday, Nvidia CEO Jensen Huang was questioned about the geopolitical risks associated with Taiwan and how he would respond if an incident occurred.

"Huang informed CEO David Solomon that they have the capability to shift from one fab to another, even though they may not be able to achieve the same level of performance or cost, but they will still be able to provide the supply."

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