The Biden administration plans to reduce Intel’s preliminary $8.5 billion federal CHIPS grant by nearly $1 billion, a move that follows the California-based company’s investment delays and broader business struggles. The new funding amount would be less than $8 billion.
Intel, which has been the biggest recipient of money under the CHIPS Act, will see its funding drop due to a $3 billion contract to produce chips for the U.S. military. This change takes into account Intel’s technology road map and customer demand.
The government’s decision to reduce the grant size comes amid concerns about Intel’s ability to fulfill its investment commitment. The company has struggled to convince customers that it can match rival Taiwan Semiconductor Manufacturing Company (TSMC) technology, which has been a blow to the Biden administration’s plans to rev up domestic chip manufacturing.
In March, President Biden announced Intel’s multibillion-dollar award and said the company’s investments would transform the semiconductor industry. However, Intel’s business troubles have complicated its negotiations over its final award. The company has cut 15,000 jobs in recent months and faces takeover bids from Qualcomm executives.
Commerce Secretary Gina Raimondo had previously encouraged tech giants like Google, Microsoft, Amazon, and Apple to make chips for their products in the United States, urging them to create demand for U.S.-made chips.
Source: https://www.nytimes.com/2024/11/24/business/washington-curtails-intel-grant.html