In an effort to reintroduce semiconductor manufacturing to the United States, the Biden administration is reportedly in discussions to grant Intel Corp. subsidies totaling more than $10 billion, according to persons with knowledge of the situation. This would be the highest award to date.
The people, who wished to remain anonymous due to the confidential nature of the discussions, anticipate that loans and direct grants will be included in Intel’s awards. Negotiations are still ongoing, they said.
There was no comment from Intel or the Commerce Department.
Incentives for the world’s leading semiconductor companies to shift production of chips from elsewhere to the US would come from the 2022 Chips and Science Act, which included $39 billion in direct grants and $75 billion in loans and loan guarantees.
As soon as Bloomberg broke the story, Intel saw a 1.1% increase in late Friday trade. At closing this year, the stock had lost 13% of its value.
Since President Joe Biden took office, semiconductor companies have made more than $230 billion in US investments. The administration hopes to create two or more advanced manufacturing clusters by 2030.
Two smaller Chips Act grants have already been announced by the Commerce Department. A “drumbeat of even bigger announcements” is expected in the next six to twelve weeks, according to Secretary Gina Raimondo’s statement from last week.
After years of dominance in the semiconductor business, Intel has recently lagged behind Asian rivals Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co., who are constructing their own US facilities in Arizona and Texas. The company has stated that its ambitions are dependent on the funding, and Intel Chief Executive Officer Pat Gelsinger has been the prominent industry voice advocating for US government backing of the sector.
Intel is spending $3.5 billion in New Mexico, $20 billion expanding in Arizona, and constructing a $20 billion facility.
According to the people, it’s unclear how Intel’s reward would be divided between loans and grants. Both the loan conditions and the standards that the Commerce Department will apply to distribute the funds over time are company-specific.
Intel has not disclosed the launch date for any of its programs. After the Wall Street Journal reported a delay from 2025 to 2026, a corporate spokeswoman stated that the company has made substantial progress in Ohio. According to an administration official, the timing is consistent with Intel’s early estimates and is determined by market conditions rather than award announcements.
The American subsidiaries of BAE Systems Plc and Microchip Technology Inc. were originally awarded Chips Act funding by the Commerce Department for sites located in New Hampshire, Oregon, and Colorado.
