Analysts are mostly keen on the new Intel CEO
Analyst Jack Gold isn't sure about Trump's bid to repeal the CHIPs act and whether Congress will allow that
And how will all this affect the chip startups?
It’s been a busy week in the 5G server chip market and the silicon market overall.
Intel has appointed its new CEO – former board member and semiconductor veteran Lip-Bu Tan – to be the architect of its turnaround.
“This is welcome news for Intel Corporation, as it appoints an industry veteran that has intrinsic understanding of the semiconductor industry, both from a product design aspect as well as the needs of enabling chip manufacturing – an area that Intel Foundry needs help in making their tools more user friendly and accessible for potential customers,” said Jack Gold, founder of J.Gold Associates.
Like many other analysts, Gold had feared that Intel would hire a financial or non-chip CEO. That would have sent a message about how the board wanted to split Intel up, but Gold noted that “Tan had a great run at Cadence,” where he was CEO from 2009 to 2021 and served on its board for 19 years.
“I think this also means that the board wants to keep Intel whole,” Gold said.
Intel’s shares are rising on the news of Tan’s appointment, up 15.64% at $23.91 on Thursday.
Trump and the CHIPs act
Intel – as well as many other smaller American semiconductor companies – could be affected by President Trump’s call for Congress to end Biden’s CHIPs act. Trump said on March 4 that he wanted to repeal the CHIPs act, which was set into law in August 2022 to bring back more microchip manufacturing to the United States.
“I think that Congress will push back if he does try to cancel it, since it’s a funded program that Congress established. There are many states involved getting significant funding from the CHIPS Act, including red states, and the economic implications are far-reaching for Ohio, NY, AZ, NM, etc.,” Gold said in an email to Fierce. “And the CHIPS Act didn’t just fund fabs – it also had a lot of money in there for training new workers that won’t get spent if it goes away, and even a significant chunk for 5G/6G research to keep the US ahead in the telco race.”
He noted that much will depend on what happens with the National Institute of Standards and Technology (NIST) distribution of CHIPs funds. Elon Musk’s Department of Government Efficiency (DOGE) has already terminated more than 70 employees from the agency on March 3.
“If NIST gets [further] decimated, then the funding really goes into a black hole,” Gold said.
“And it’s not just the fabs and the chip companies affected. If the funding doesn’t go through, it’s likely a lot of potential jobs won’t go through either, which will create economic hardships for communities expecting them (like around the Intel Fab in OH),” Gold added.
“It’s still a big question mark,” he commented.
Startups and CHIPs
Talking to Fierce on February 25, new CEO of portable Open RAN 5G Radio Unit (RU) startup Eridan – Omid Tahernia – said that Eridan “doesn’t see an issue” with the CHIPs act funding, from which the startup has received a $36.8 million grant.
“The way the grant works is when we occur expenses we submit those,” Tahernia said, before Trump called for the end of the act. Of course, Eridan is backed by investors like Capricorn as well.
Eridan is planning to sell its 5G radios to private network systems integrators. The startup is ramping up production of its RU right now.
Fierce will be watching to see what happens to the CHIPs act after Trump and DOGE get through with it. We’ll see if the Republican Congress deigns to take apart a bipartisan bill.