Intel CEO Patrick Gelsinger speaks before President Joe Biden’s remarks at Intel Ocotillo Campus in Chandler, Arizona, March 20, 2024.
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chip manufacturer intel CHIPS and the Office of Science and Law have finalized a $7.86 billion grant, the administration announced Tuesday, as the Biden administration moves to provide funding before President-elect Donald Trump takes office.
The $8 billion will be used to build Intel’s factory. This top-line figure is lower than the $8.5 billion in subsidies originally announced, but officials say it is because Intel’s $3 billion contract with the Department of Defense came from CHIPS Act funds. , this amount was reduced.
The deal, announced in September, is a rare bright spot in the company’s struggling efforts to grow its fab business.
“Thanks to the leadership of President Biden and Vice President Harris, our CHIPS award enables Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history,” Commerce Secretary Gina Raimondo said in a release. said.
“Intel is deeply committed to advancing these shared priorities as we further expand our U.S. operations in the coming years,” Intel CEO Pat Gelsinger said in a release. I mentioned it in.
CNBC earlier reported that the two sides were close to finalizing the grant.
USA wins Taiwan Semiconductor Manufacturing Co., Ltd. A $6.6 billion grant earlier this month raised investors’ hopes that Intel could soon get cash funding. Intel has benefited from the CHIPS tax break, but has yet to receive its award, something Gelsinger has expressed frustration about.
Gelsinger told CNBC in October that he was “frustrated by the lack of swift action” regarding the CHIPS grant. “They were too bureaucratic in their processes. We look forward to seeing them completed.”
Intel’s struggles have intensified since the grant was first announced. The New York Times, citing four people familiar with the matter, cited uncertainty about Intel’s ability to make good on its investment commitments, changes in Intel’s technology roadmap and changes in Intel’s technology roadmap. Citing the changes, it was reported on Sunday that the government had decided to reduce subsidies by about $500 million. customer requirements. Government officials said the pay cuts had nothing to do with Intel’s problems.
U.S. House Speaker Mike Johnson (R-Louisiana) previously said he might consider repealing the bipartisan bill, but later backtracked on that statement. The Biden administration and grant recipients have touted the bill as a job creation device.
Inter’s struggles have increased significantly this year. The company posted nearly $17 billion in losses last quarter, curtailing Mr. Gelsinger’s ambitious plans around the world.
Intel announced earlier this year that it would cut 15,000 jobs through layoffs and voluntary buyouts. The company is moving to make it easier to separate its foundry business from its traditional businesses, people familiar with the matter said earlier. They say they are cooperating. CNBC previously reported that Intel is seeking to raise cash through a minority stake in the Altera business and has been approaching interested buyers for several weeks.
CNBC’s Megan Casella contributed to this report.
