AltaScient Insights - Semiconductors - Week of August 25, 2025

AltaScient
Aug 27, 2025
3 min read

Intel HQ, Santa Clara, CA, Image Credit: iStock by Getty Images

Outlook: Global Shifts in Semiconductor Policy

Government stake in Intel can support the company whose revenue and margins have shown declining trends. This move, combined with comments on potential similar investments in other firms, indicate a shifting government strategy for private enterprises. Globally, China is pursuing its own AI chip capabilities and India is developing new semiconductor investments. U.S. and EU have capped tariffs on exports at 15% which will also cap semiconductor tariffs vs 100% announced on August 6th.

New Investors

US to invest in Intel: The U.S. government announced a plan to invest $8.9 billion in Intel, equivalent to a 9.9% equity stake. According to Intel’s SEC filing, the transaction may affect international sales and eligibility for future grants.

Breakdown of the funding:

$5.7 billion via the CHIPS Act,
$3.2 billion through the Secure Enclave Program,
433.3 million primary shares of Intel common stock purchased.

Intel also secures $2bn lifeline from Japan’s SoftBank: On August 19, SoftBank announced a $2 billion investment in Intel, expected to result in a 2% stake. The investment follows reports of U.S. government consideration of direct involvement in the company.

Developing Own Capabilities

AI Capabilities: Chinese companies are advancing next-generation AI chip capabilities. Reports indicate that firms including Huawei Technologies, Cambricon Technologies, Moore Threads, Hygon Information Technology, and MetaX Integrated Circuits may contribute to chips used in new DeepSeek models. Multiple vendors could potentially be involved in supply.

India Allocates Nearly All Semiconductor Fund, Limits New Projects: India has allocated nearly all of its semiconductor incentive fund. Out of ₹65,000 crore, about ₹62,900 crore (97%) has been committed, leaving limited capacity for new large-scale projects. The funding is part of the broader ₹76,000 crore India Semiconductor Mission. These initiatives cover logic, memory, compound semiconductors, packaging, and design, with facilities spread across Gujarat, Uttar Pradesh, Odisha, Assam, Punjab, and Andhra Pradesh.

U.S.-EU Tariff Agreement

The U.S. and EU reached an agreement to cap tariffs on exports at 15%. The measure applies to sectors including pharmaceuticals and semiconductors. This replaces earlier proposals of tariffs up to 100% on some imports, announced on August 6.

Highlights

The U.S. government and SoftBank have taken equity stakes in Intel.
China is moving forward with multiple potential suppliers for advanced AI chips.
India has nearly completed allocation of its semiconductor incentive fund.
The U.S. and EU have agreed to cap tariffs at 15%, affecting semiconductors among other goods.

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