The Biden administration created the CHIPS Act as an initiative to strengthen the United States’ position in the competitive chip development and production market. It involves multi-billion-dollar investments in semiconductor companies with factories in the country. Intel, one of the big names that would benefit from the CHIPS Act, is reportedly about to get $8.5 billion in direct funding from the US government.
According to the Financial Times, Intel would benefit from the funding before the end of this year. In the midst of a particularly challenging year for the company, marked by declining share prices and brand damage due to the controversy surrounding the rapid degradation of processors, this funding could be a welcome relief.
Intel may get $8.5 billion from the US government by year’s end
The CHIPS Act provides for up to $400 billion in funding for semiconductor companies in the United States. It would benefit not only American companies, but also foreign ones with factories in the country, such as TSMC. Intel secured around $20 billion in grants and loans earlier this year. However, a mid-August report revealed that 40% of planned CHIPS Act investments were experiencing delays, with potential cancellations in some cases.
According to the new report, talks between Intel and state officials are ongoing and in advanced stages. While funding was certain, its completion before 2025 was not. However, people familiar with the discussions confirmed to the Financial Times that Intel will receive $8.5 billion as part of the deal by year-end. The preliminary agreement also called for up to $11 billion in loans to build and modernize Intel chip factories in Arizona.
Reports in September revealed “significant interest” from Qualcomm in acquiring part of Intel’s chip design business. Qualcomm is best known for its chipsets and modems for mobile devices. However, it is reportedly looking to strengthen its position in the desktop segment. Anyway, the new report claims that a total or partial sale of Intel could disrupt ongoing talks about state funding.
Intel seeking to regain its position in the market
The funding may help Intel regain some of the lost ground in recent years. TSMC has taken over as the world’s leading chipmaker. In addition, the North American company is falling out of the AI race by not offering attractive tech developments to the general public or manufacturers. On the other hand, big names like Nvidia and AMD have managed to capitalize on the rise of AI.