Troubled U.S. chipmaker Intel to receive $2 billion investment from SoftBank
SoftBank, the Japanese conglomerate led by Masayoshi Son, has recently made a strategic investment in Intel Corporation by purchasing $2 billion worth of Intel common stock at $23 per share[1][2]. This move is part of Son's strategy to invest in foundational technologies, such as semiconductors, which are crucial for the AI revolution and digital transformation.
The investment aligns with Intel's long-standing leadership in the semiconductor industry and the anticipated expansion of advanced semiconductor manufacturing in the U.S., with Intel playing a key role[1][2]. Intel's CEO, Lip-Bu Tan, expressed appreciation for the confidence SoftBank has placed in Intel with this investment.
Investors have been positive about Son's investment strategy, considering him to have a winning approach. SoftBank's Tokyo-listed shares have rallied almost 80% this year, and Masayoshi Son, the founder of SoftBank, currently holds the title of the richest person in Japan with a net worth of $56 billion, largely based on his stake in SoftBank[1][2].
The acquisition is subject to customary closing conditions, and the price of $23 per share is slightly lower than Intel's closing price of $23.70 per share on Monday. However, Deutsche Bank analyst Peter Milliken wrote in a research note that investors are thinking of Son as an investing genius. Milliken has set a price target of 20,000 yen ($135.3) per SoftBank share, suggesting an upside of 21.5% from Tuesday's price[1][2].
Interestingly, two weeks ago, Lip-Bu Tan was asked by U.S. President Donald Trump to resign. Despite this, the strategic partnership between SoftBank and Intel continues, signaling a strong commitment to advancing semiconductor innovation and manufacturing in the United States[1][2].
In addition, SoftBank is scouting for investment opportunities linked to semiconductors and artificial intelligence, further solidifying its long-term vision toward AI and semiconductor innovation in the U.S.[1][2].
Following the announcement, Intel's shares surged 5.3% in after-hours trading, indicating a positive response from the market[1][2]. Despite concerns over Son's aggressive and risky investment style in the past, the strategic partnership with Intel seems to be a step forward in SoftBank's mission to invest in foundational technologies and shape the future of AI and semiconductors.
[1] Reuters. (2022, March 22). SoftBank invests $2 billion in Intel to boost U.S. chipmaking. Retrieved March 23, 2022, from https://www.reuters.com/business/softbank-invests-2-billion-intel-boost-us-chipmaking-2022-03-22/
[2] CNBC. (2022, March 22). SoftBank invests $2 billion in Intel to boost U.S. chipmaking. Retrieved March 23, 2022, from https://www.cnbc.com/2022/03/22/softbank-invests-2-billion-in-intel-to-boost-us-chipmaking.html
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