We think of AMD and Intel as exactly what they are — fierce rivals. However, the U.S. government is encouraging Intel to consider a merger with a rival, such as AMD, to counteract the intense financial trouble the company has been in over the past several months, according to a report from Semafor.
Intel just released its earnings for the third quarter of the year, where the company revealed that it had lost $16.6 billion. Year-over-year, Intel’s net profit margin has dropped by 6,064.76%. That’s not a typo. Intel is bleeding money, and according to the report, the U.S. government sees the chipmaker as too important to go under. At the moment, Semafor reports that talks between the government and Intel are “purely precautionary,” but multiple options to recover the brand are on the table.
One such option is a merger, with potential companies being AMD or Marvell. The merger would only impact Intel’s chip design business, while its foundry business would remain unscathed. This, in the eyes of the U.S. government, makes sense. Although enthusiasts debate about whether AMD or Intel make the best processors, Intel has been at the heart of government subsidies through the CHIPS Act due to its manufacturing business.
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Under the CHIPS Act, Intel has been promised close to $30 billion in government subsidies split across grants and low-interest loans. Despite passing in 2022, however, the CHIPS Act has yet to pay out any money to Intel, or any other recipients. Intel hasn’t shared critical details about its financial situation with the government to prove it has a viable plan to take advantage of the additional funds, according to reporting from Bloomberg.
At the moment, the future of Intel doesn’t hang on recent CPUs like the Core Ultra 9 285K, but rather what it can deliver in its manufacturing facilities. Earlier this year, Intel canceled its 20A node in order to focus engineering resources on 18A. The company has already scored contracts for 18A with Microsoft and the U.S. Department of Defense, and with Intel losing cash quarter-over-quarter, it wants to fulfill those contracts as fast as possible.
This focus still concerns Intel’s manufacturing business. Intel has considered splitting its design and manufacturing businesses, which might help the company in the long run. If a company like AMD were to purchase the design wing, the funds awarded to Intel would go strictly toward manufacturing, which is reportedly the U.S. government’s main concern given rivals like TSMC in Taiwan and a growing semiconductor industry in mainland China.
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