As Democratic president-elect, Joe Biden, gears up to move into the White House early next year, certain industries are already seeing higher stock market activity as a result of his win. Just days ago, Bob Swan, the CEO of Intel, sent an open letter to Biden with a list of investment and technology recommendations. What does this power move mean for INTC stock? Let’s find out.
Semiconductor And Tech Companies Ready For Gains Under The Biden Administration
Even though the pandemic has pushed this industry back by some years, a new political party means that its chances to redeem itself have come. Keeping the Intel CEO’s public gesture in mind, it’s clear that the industry is ready to compete with the international market. All they need is backing from the federal government.
In the open letter, Bob Swan requested the federal government to invest heavily in INTC stock. We will have to give it to him; it’s a strong move. He said that as per the Semiconductor Industry Association, the semiconductor industry in the US makes up a mere 12 percent of the global industrial market. Asia is a big player in the semiconductor industry with over 80 percent majority. One of the main reasons for this is because, unlike the other nations, the US government is not backing its local companies. Moreover, growing subsidies from foreign governments and growing costs are also putting the American semiconductor industry at a disadvantage. Swan further said that direct investment from the federal government into INTC stock would significantly increase the US semiconductor industry’s global image.
Good Chances For INTC Stock As America Looks Towards Local Manufacturing
In recent years, the US government has shown an inclination towards local manufacturing. On top of that, the semiconductor industry has critical security resources, which only betters Intel INTC stock’s chances.
Moreover, the federal government also helped Taiwan Semiconductor Manufacturing open up a plant in Arizona that’s worth around $12 B. Even so, we must note that the political tensions between China and the US might lead to a derailment in this Arizona plant.
So, it’s not such a shocking idea for Intel INTC stock to offer investment opportunities to the Biden Administration. Swan argues that his company deserves lower costs to manufacture chips. Note that Intel lost a ton of money in 2020 after they screwed up the manufacturing process of 10nm company chips.
If the US semiconductor industry wants to up its game in the global market, it surely needs strong backing from the US government. We should also note that higher global competition will mean a higher supply of chips than the market demand.
Whatever be the results, INTC stock will benefit the general public.