Intel Will Receive Less U.S. Government Funding Than Expected but Still More Than Any Other Chipmaker

The CHIPS and Science Act is the largest U.S. effort to bolster domestic semiconductor production. Approved by the Biden administration in July 2022, the program allocates at least $52 billion to companies involved in designing or manufacturing integrated circuits.

Intel is set to receive the largest portion of funding under this program. This subsidy comes at a critical time, as the company seeks a significant capital infusion. Led by CEO Pat Gelsinger, Intel is the most advanced U.S.-based semiconductor manufacturer in terms of integration technologies.

Initially, Intel was slated to receive $3.5 billion to produce cutting-edge semiconductors for defense and intelligence applications. Of this, $1 billion was set to come from the Department of Commerce and $2.5 billion from the Department of Defense. However, that plan fell through—at least temporarily.

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The Money Intel Will Reportedly Receive From the U.S. Government

Six months after the Defense Department deal stalled, the government revived the original plan. Intel announced it would receive up to $3 billion under the CHIPS and Science Act to produce secure semiconductors for the U.S. government. The plan, called Secure Enclave, reflects a key requirement from the Biden administration: that chipmakers produce semiconductors under strict confidentiality.

Separately, the U.S. government had promised Intel nearly $20 billion in early 2024 to expand its U.S. manufacturing infrastructure. This included $8.5 billion in grants and up to $11 billion in loan guarantees for new plants in Arizona, New Mexico, Ohio, and Oregon.

Ultimately, the Biden administration decided to reduce Intel’s funding slightly. The $8.5 billion in grants will drop to just under $8 billion. This adjustment partly reflects the execution of Intel’s $3.5 billion agreement with the Defense Department. Still, according to The New York Times, the government is concerned about the company’s financial stability.

The Commerce Department has also pressured major U.S. companies—including Microsoft, Apple, and Google—to purchase domestically produced chips, presumably from Intel. The Biden administration must finalize these deals before President-elect Donald Trump assumes office on Jan. 20.

Image | Intel

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