The Biden administration is reportedly engaged in discussions to provide Intel Corp. with over $10 billion in subsidies, marking the largest award yet under the plan to revitalize semiconductor manufacturing within the United States. Sources familiar with the matter revealed that the proposed incentive package for Intel may comprise both loans and direct grants. However, these negotiations remain ongoing and confidential, as neither the Commerce Department nor Intel have commented on the matter.
The proposed subsidies stem from the 2022 Chips and Science Act, which earmarked $39 billion in direct grants alongside $75 billion in loans and loan guarantees aimed at enticing top semiconductor companies to relocate chip production to the US after years of overseas manufacturing.
Upon reports of the potential subsidy, Intel’s stock saw a modest increase of up to 1.1% during late trading on Friday, signaling investor optimism. However, Intel’s stock has experienced a 13% decline year-to-date.
Since President Biden assumed office, semiconductor firms have collectively invested more than $230 billion in the US, aligning with the administration’s objective to establish at least two leading-edge manufacturing clusters by 2030.
While the Commerce Department has already announced smaller Chips Act grants, Secretary Gina Raimondo has hinted at forthcoming significant announcements within the next six to 12 weeks.
Intel, a longstanding dominant force in the chip industry, has faced stiff competition from Asian counterparts like Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. Intel CEO Pat Gelsinger has been a vocal advocate for US government support in the sector, emphasizing that the company’s plans hinge on securing adequate funding.
Intel’s ongoing projects include a $20 billion facility in Ohio, a $20 billion expansion in Arizona, and a $3.5 billion investment in New Mexico. However, the distribution of the proposed award between grants and loans remains uncertain, with loan terms likely to vary based on company-specific factors.
While Intel has not disclosed the commencement timeline for its projects, progress in Ohio has been noted. Reports of a potential delay to 2026, as suggested by the Wall Street Journal, were refuted by a company spokesperson, affirming alignment with initial projections and market dynamics rather than award announcements.
In addition to Intel, the Commerce Department has previously announced Chips Act grants for other entities, including the American subsidiary of BAE Systems Plc and Microchip Technology Inc., for facilities in various states across the US.
