The US Department of Commerce plans to reduce Intel's preliminary $8.5 billion CHIPS Act grant to less than $8 billion. New York Times reported.
The department's decision to cut the price by at least $500 million is reportedly related to Intel's delay in completing a chip manufacturing facility in Ohio.
Originally scheduled for completion next year, the facility's timeline has now been pushed back to the end of the decade.
This decision follows the administration awarding up to $3 billion in direct funding under the CHIPS and Science Act for the Secure Enclave program to Intel in September.
Under the $3 billion contract, Intel will produce semiconductors for the US Department of Defense.
This development comes as Intel faces significant financial challenges. The company is reportedly facing its biggest quarterly loss in 56 years, prompting the company to scale back investments and focus on cost reduction.
The U.S. government has announced nearly $20 billion in grants and loans for Intel to boost domestic production of semiconductor chips this spring.
This was part of the administration's plan to increase U.S. chip manufacturing capabilities.
The US announced a preliminary agreement for $8.5 billion in grants and up to $11 billion in loans for Intel in Arizona.
The financing was intended for the construction of two new factories and the modernization of an existing one.
This initiative is part of the CHIPS and Science Act of 2022, which aims to strengthen domestic semiconductor manufacturing with $52.7 billion in funding.
Last month, the US government announced plans to impose caps on the export of advanced AI chips to specific countries.
This development would be part of a broader strategy to manage national security risks associated with the proliferation of AI technology.
“US cuts Intel's federal chip subsidy to less than $8 billion in new deal” was originally created and published by Verdict, a brand owned by GlobalData.
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