Intel CEO Patrick Gelsinger speaks previous to President Joe Biden’s remarks at Intel Ocotillo Campus on March 20, 2024 in Chandler, Arizona.
Rebecca Noble | Getty Pictures
Chipmaker Intel and the CHIPS Act Workplace are near finalizing a deal which might award the corporate a roughly $8 billion grant, in response to an individual accustomed to the matter, because the Biden administration strikes to dole out funds earlier than President-elect Donald Trump’s inauguration.
That $8 billion will go towards Intel’s factory-building efforts, mentioned the individual. The Commerce Division is anticipated to finalize the awards within the coming weeks, the individual mentioned.
Intel can be in line for a $3 billion contract to fabricate chips for the Division of Protection, a deal introduced in September and a uncommon shiny spot within the firm’s struggling efforts to develop its fab enterprise. The Commerce Division and Intel declined to touch upon the matter.
The Wall Road Journal first reported that the 2 sides had been near finalizing the grant.
However Intel’s struggles have intensified for the reason that grant was initially introduced. The New York Occasions, citing 4 individuals accustomed to the matter, reported Sunday that the federal government had determined to lower the grant by roughly $500 million resulting from uncertainties about Intel’s means to execute on its funding dedication, and due to Intel’s shifting expertise roadmap and buyer demand.
The U.S. awarded Taiwan Semiconductor Manufacturing Co. a $6.6 billion grant earlier this month, elevating investor expectations that money funding for Intel would come quickly. Intel has benefited from CHIPS Act tax breaks however has not but acquired money awards, one thing which Intel CEO Pat Gelsinger has expressed dissatisfaction with.
“We’re annoyed that hasn’t moved sooner,” Gelsinger instructed CNBC in October, referring to the CHIPS Act grants. “They have been too bureaucratic in that course of. We’re anxious to see these completed.”
U.S. Home Speaker Mike Johnson had beforehand mentioned he would possibly look to repeal the bipartisan CHIPS Act, however he then walked again these feedback. The Biden administration and grant awardees have touted the laws as a job-creating machine.
Intel’s struggles have elevated considerably this yr. The corporate posted an almost $17 billion loss final quarter and has been dialing again Gelsinger’s formidable plans worldwide.
Intel introduced earlier this yr it could trim again 15,000 jobs through layoffs and voluntary buyouts. It has made strikes to make its foundry enterprise extra simply separable from its legacy enterprise, and has been working with advisors on activist protection and a broader strategic assessment, individuals accustomed to the matter beforehand mentioned. Intel can be searching for to lift money through a minority stake within the Altera enterprise, CNBC beforehand reported, and has been sounding out acquirers for weeks.
It could even be staring down a once-unthinkable prospect: a possible takeover bid from an ascending Qualcomm, which has a market cap that now dwarfs Intel’s.
