Intel Corp. on Tuesday finally received a $7.9 billion grant from the CHIPS and Science Act (2022) to assist its plans to build factories in the U.S., weeks before the Trump administration returns, amid vows to scrutinize the bill and possibly repeal it.
The grant is less than the $8.5 billion that was announced earlier this year, following investment delays in chip facilities planned in Ohio and struggles with the company’s fab business.
“Intel is deeply committed to advancing these shared priorities as we further expand our U.S. operations over the next several years,” Intel CEO Pat Gelsinger said in a statement announcing the deal.
“Thanks to the leadership of President Biden and Vice President Harris, our CHIPS award is enabling Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history,” Commerce Secretary Gina Raimondo said in a release.
Still, the decreased government grant was due to uncertainties over the chipmaker’s ability to made good on its investment, its ever-evolving technology road map, and customer demand, according to a New York Times report, citing four people familiar with the matter. Senior administration officials said the lower award was not because of any issues at Intel.
While the Biden administration has touted the CHIPS Act as a domestic jobs-creation program, President-elect Trump has said he is taking a closer look at the bill and U.S. House Speaker Mike Johnson, R-La., said he might look to repeal the bipartisan legislation. Johnson hastily walked back his comments, however.
Intel aggressively lobbied for the bill, and the Commerce Department okayed the initial grant to support Intel’s operations expansion in Ohio, Arizona, New Mexico and Oregon.
Earlier this month, the U.S. awarded Taiwan Semiconductor Manufacturing Co. a $6.6 billion grant to allow TSMC to build more capacity in the U.S.
Intel’s business struggles this year complicated negotiations over its final award, which took longer than expected. The company lost $17 billion in its last quarterly earnings report and its sales slumped 6%, leading to the company’s decision to eliminate 15,000 jobs and scale back Gelsinger’s ambitious plans worldwide. Meantime, its market value has plunged to $106 billion from about $500 billion in 2020.
The company has also explored separating its foundry business from its legacy operations, as well as consulting advisers on an activist defense following reports Qualcomm Inc. could acquire a portion, if not all, of Intel.
