The U.S. government plans to cut Intel’s much-anticipated $8.5 billion federal chips grant to below $8 billion, according to The New York Times. The grant, part of the CHIPS and Science Act, was designed to bolster semiconductor production in the United States amidst growing competition with China.
While Intel remains a critical player in the domestic chip manufacturing ecosystem, this reduction signals a more cautious government approach to allocating public funds. The revised plan considered a $3 billion contract Intel had been offered to produce chips for the Pentagon. This additional offer might be the reason for the reduction.
According to the Joe Biden administration, they have awarded nearly $20 billion to Intel in grants and loans, supercharging the company’s domestic semiconductor chip output and marking the government’s largest outlay to subsidize leading-edge production.
The United States has revealed a tentative deal to provide Intel with $8.5 billion in grants and up to $11 billion in loans for its Arizona operations. Some of the funding will be used to build new factories and modernize existing ones.
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The 2022 CHIPS and Science Act allocates $52.7 billion to enhance domestic semiconductor manufacturing, with $39 billion designated for production subsidies and $11 billion set aside for research and development initiatives.
