Tokyo: Struggling chipmaker Intel, which once powered all computers used a decade ago, has now got another lifeline from Japan-based Softbank. The company, once worth a tad less than $500 billion during the height of the dotcom boom a quarter of a century ago, is now struggling to stay relevant, missing various opportunities to upgrade its status.
On Monday, August 19, SoftBank CEO Masayoshi Son announced a $2 billion investment in Intel at a press conference in Tokyo. SoftBank will pay $23 per share, valuing its stake to under 2% of the company. SoftBank will not commit to buy Intel’s chips or seek a board seat, according to sources close to the development.
Intel’s shares have risen almost 5% following the news, giving its investors another reason to cheer, after US President Donald Trump proposed an unusual step to invest in the company for its much-delayed $31 billion chip fabrication plant coming up in Ohio.
SoftBank’s investment is not connected to Trump, the reports clarified, even as most industry insiders acknowledge the immense pressure on the company’s CEO Lip Bu-Tan to turn around the company after its massive $18.8 billion loss in 2024, even though it remains the world’s fourth largest semiconductor maker, behind Nvidia, Samsung and SK Hynix.
Despite this, the company is still capable of manufacturing high-end semiconductors at scale, despite losing the AI semiconductor race to Nvidia and TSMC. The company is pinning its hopes on its Ohio plant, which is expected to generate 3,000 jobs to manufacture chips for various companies. Given that most of the chips come from abroad, this plant aligns well with Trump’s campaign pitch, where the majority of jobless Americans voted for him to bring the jobs back home.
After all, Intel has been one of the pioneers in America’s booming technology scene.
“They may not be at the top like they once were, but they are still, ultimately, very important for all industries because their chips are used virtually everywhere,” Alvin Nguyen, a senior analyst at Forrester, explained. Intel may be struggling, but some of the concerns highlighted may be ‘overstated’ he explains. SoftBank CEO Masayoshi Son understands this, given his penchant for big, bold risks on companies that others dared not consider.
