Intel’s CFO Affirms Long-Term Partnership with TSMC as Shares Surge After Confirmation of US Funding to Repay Debt

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Today, shares of chip manufacturer Intel experienced a 2% increase, following remarks made by CFO David Zinsner at Citi’s 2025 Global Technology, Media, and Telecommunications Conference. During the conference, Zinsner highlighted that the company is poised to finalize its divestment of Altera. He also discussed the U. S.government’s historic 10% equity stake in Intel, characterizing it as a significant benefit for both taxpayers and the broader American public.

Intel CFO Indicates Plans to Utilize U. S.Equity Funds to Alleviate Debt by 2025

In his conversation with Citi analyst Christopher Danely, Zinsner noted that prior to the U. S.government’s investment, Intel faced uncertainty surrounding approximately $5.7 billion in remaining grants, alongside $2.2 billion already secured. The future of this funding was unclear, with Zinsner explaining that the uncertainty surrounding those grants created challenges for Intel.

He elaborated that the previously secured $2.2 billion also came with clawback provisions, complicating the company’s financial outlook. Zinsner emphasized that the U. S.investment transformed this uncertainty into an equity stake. In addition, Intel received the funds upfront (with the exception of $3 billion, which is slated for disbursement over several years), further solidifying the company’s financial foundation.

Addressing concerns regarding potential government interference in company operations, Zinsner assured stakeholders that the government would align its voting with the recommendations of Intel’s board. He also confirmed that the Altera divestment is expected to conclude in the coming weeks, providing an influx of $3.5 billion. Meanwhile, he anticipates that Softbank’s investment will materialize by the end of the current quarter, pending regulatory approvals.

These funds will be directed towards settling $3.8 billion in debt due this year, with Zinsner expressing confidence that all outstanding obligations will be fulfilled without the need for refinancing.

In response to Danely’s question about the potential spinoff of Intel’s Foundry business into a subsidiary for greater investment flexibility, Zinsner indicated that while possible, it is unlikely to occur in the near term due to the current state of the business.

Looking ahead, Zinsner speculated that a spinoff could happen eventually, although any sale of the Foundry business would be limited to less than 49% ownership due to existing government warrants. He acknowledged that Intel has faced challenges in the past by “spending money ahead of demand, ”but noted a growing confidence from CEO Lip-Bu Tan regarding the upcoming 14A process. While Zinsner recognized the associated risks of potential customer shortfalls, he expressed optimism about the process’s future viability.

He provided insights regarding the financial aspects of the next-generation manufacturing process, stating:

“In addition, 14A is more expensive than 18A. You know it’s not significantly, in terms of investment, so it is a higher cost wafer for sure. And partly that’s because we are expecting to use High NA EUV tools in 14A which was not in case in 18A.”

Besides the adoption of High NA tools, Zinsner noted that the complexity of 14A would lead to additional lithography costs.

Over the past few years, Intel has increasingly relied on TSMC for certain product components. Zinsner anticipates that Intel’s dependency on TSMC will fluctuate based on the Foundry business’s performance and the specific products being developed. He affirmed, however, that Intel will maintain a long-term partnership with TSMC, recognizing the company’s superior technology and support. Currently, approximately 30% of Intel’s products are sourced from TSMC, a figure that may decrease slightly but will nonetheless be higher than in previous years.

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