Intel received $5.7 billion in cash as part of a deal negotiated by US President Donald Trump for a 10 percent ownership in the struggling chipmaker, according to finance chief David Zinsner at an investor conference.
The stake in Intel announced by the US government last week serves as an incentive for the company to maintain control over its contract manufacturing business, known as foundry, Zinsner explained.
In connection with the agreement, the government secured an additional five percent warrant in case Intel's ownership of its foundry operation falls below 51 percent.
"I don't believe there's a high chance that we would drop our stake below 50 percent," Zinsner noted. "So ultimately, I would anticipate that (the warrant) would become worthless."
Intel has been working to distance its contract chip manufacturing segment, or foundry, from its design operations. The company has already indicated its potential interest in attracting outside investment for the foundry unit, establishing a separate management board for its oversight.
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If Intel opts for outside investors in the foundry business, Zinsner mentioned that the company is inclined toward selecting a strategic investor rather than a purely financial one. However, Intel is "years away from that." In July, Intel revealed that the future of its foundry business hinges on securing a major client for its upcoming manufacturing process referred to as 14A.
Without that, it might exit the foundry sector entirely.
"Zinsner minimized concerns regarding its foundry's potential risks. "Our legal team is always examining areas where we should give more details concerning our risks," he stated.
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Intel aims to secure a significant customer next year while committing to uphold "financial discipline" during the development of the next-generation manufacturing technology and techniques, Zinsner mentioned. He argued that investing in 14A solely for Intel's internal use is too substantial to ensure an "appropriate" return on investment for shareholders.