The White House cuts Intel’s CHIPS award by more than $600 million. The company was originally scheduled to receive $8.5 billion from the Domestic Silicon Manufacturing Bill, but instead will receive up to $7.85 billion. On Tuesday, The New York Times reported that Intel has extended the opening of some fabs beyond the government’s 2030 deadline. However, the Commerce Department said the funding cuts were due to a $3 billion military contract Intel received.
Last month, Intel suffered its largest quarterly loss in history after announcing 15,000 layoffs in August. The chipmaker’s difficulties have reportedly led some government officials to worry about its ability to fulfill a central component of the CHIPS Act proposed by the Biden White House.
Intel will receive at least $1 billion in CHIPS Act funding by the end of the year. By the end of the decade, the company plans to invest $90 billion in the United States, down from its original goal of $100 billion over the next five years. The Commerce Department said the chipmaker still plans to invest the full $100 billion in projects in four states: Arizona ($3.94 billion), Oregon ($1.86 billion), Ohio ($1.5 billion), and New Mexico ($500 million).
One of the outgoing president’s landmark bills, the CHIPS Act is projected to create more than 125,000 jobs in 20 states, boosting U.S. silicon production and reducing dependence on foreign manufacturers. Intel is the largest recipient of CHIPS Act funds.
The Department of Commerce is reportedly rushing to finalize the distribution of funds to recipients before Trump’s second term begins in January. The president-elect criticized the legislation and its cost during his campaign, and House Speaker Mike Johnson said at the time that Republicans would “probably” try to repeal the CHIPS law. However, Johnson later retracted his words, and after the election, analysts predicted that the law would likely remain in place.
Earlier this month, Taiwan Semiconductor Manufacturing Company (TSMC), the world’s leading manufacturer of advanced chips, was the first to receive the final distribution of its grants. It will receive $6.6 billion (including at least $1 billion by the end of the year) for three fabs in Arizona, which are expected to create “tens of thousands of jobs by the end of the decade.”
US Secretary of Commerce Gina Raimondo has reportedly called on tech companies – including Apple, Amazon, NVIDIA, AMD, and others – to cooperate with Intel, as the 56-year-old company is the only US manufacturer of logic chips. However, most companies have reportedly rejected its calls because “Intel’s chip manufacturing technology is not as sophisticated” as TSMC’s, according to a NYT report last month.
Although Taiwan is an ally and economic partner of the United States, the Biden administration reportedly considers its dependence on it “increasingly risky” as China poses a constant threat of taking over the self-governing island. Last month, China conducted military “exercises” in the sea and skies around Taiwan as a warning after the island’s president, Lai Ching-jeou, reaffirmed the island’s independence in a holiday speech. The U.S. State Department said it was “gravely concerned” by the show of force.
