By The Verge | Created at 2024-11-26 13:03:12 | Updated at 2024-11-26 15:20:43
2 hours ago
The Biden administration is giving Intel $7.865 billion in CHIPS Act funding to boost domestic semiconductor manufacturing in the US. The agreement confirmed by the US Department of Commerce today is the largest award granted under the CHIPS Act to date, though notably smaller than the up to $8.5 billion earmarked for the chip maker in March.
“Today’s award marks another key step in implementing President Biden’s CHIPS and Science Act and the Investing in America agenda to reshore manufacturing, create thousands of good-paying jobs, and strengthen our economy,” White House Deputy Chief of Staff Natalie Quillian said in the announcement.
The confirmed CHIPS investment will be put towards building and expanding Intel’s semiconductor fabrication facilities in Arizona, New Mexico, Ohio, and Oregon, which is expected to create up to 30,000 job roles across all four states. The Wall Street Journal reports that Intel will receive at least $1 billion in funds later this year, with the chipmaker promising to not engage in stock buybacks for five years.
According to The New York Times, the funding was reduced because Intel was awarded a separate $3 billion contract in September to develop chips that the US government will use in national security products and military applications, and because some of Intel’s project timelines had extended beyond a 2030 government deadline.
The funding comes despite Intel scaling back some of its ambitions. Its expansion in Ohio will provide 3,500 fewer jobs than the 10,000 previously estimated, and the company has reduced its planned investments in US manufacturing from $100 billion over the next five years to $90 billion by the end of the decade.
Intel’s been on the ropes for the last few months. It ran into trouble with its next-gen 18A manufacturing process, laid off more than 15,000 employees, and reported losses of $16.6 billion in its last quarterly report — its biggest quarterly loss since the company was founded in 1968. Qualcomm even made an initial approach to acquire the beleaguered chipmaker but those plans have now reportedly cooled.
With Intel locked in, the US Commerce Department has now completed agreements with six companies to distribute $19 billion of the total $39 billion in funding it has available. We’ll likely see more announcements in the coming weeks as time is running short to dispense the remaining funds before the Trump administration takes office and makes good on its plans to walk back the CHIPS Act.
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