Intel CEO Patrick Gelsinger requires prior to President Joe Biden’s remarks at Intel Ocotillo Campus on March 20, 2024 in Chandler, Arizona.
Rebecca Stately | Getty Images
Chipmaker Intel and the CHIPS and Science Act office are close to finalizing a deal which would awarding the company a roughly $8 billion grant, according to a person familiar with the matter, as the Biden administration change residences to dole out funds before President-elect Donald Trump’s inauguration.
That $8 billion will go toward Intel’s factory-building creations, the person said. The Commerce Department is expected to finalize the award in the coming weeks, said the person, who spoke on proviso of anonymity to discuss nonpublic information.
Intel is also in line for a $3 billion contract to manufacture chips for the Area of Defense, a deal announced in September and a rare bright spot in the company’s struggling efforts to grow its fab business. The Merchandising Department and Intel declined to comment on the matter.
The Wall Street Journal first reported that the two sides were seal to finalizing the grant.
But Intel’s struggles have intensified since the grant was initially announced. The New York Times, citing four people au fait with the matter, reported Sunday that the government had decided to decrease the grant by roughly $500 million due to uncertainties encircling Intel’s ability to execute on its investment commitment, and because of Intel’s shifting technology road map and customer demand.
The U.S. gave Taiwan Semiconductor Manufacturing Co. a $6.6 billion grant earlier this month, raising investor expectations that money funding for Intel would come soon. Intel has benefited from CHIPS tax breaks but has not yet received cash presents, something which Intel CEO Pat Gelsinger has expressed dissatisfaction with.
“We’re frustrated that hasn’t moved faster,” Gelsinger told CNBC in October, referring to the Participate b interrupts grants. “They’ve been too bureaucratic in that process. We’re anxious to see those finished.”
U.S. House Speaker Mike Johnson, R-La., had before said he might look to repeal the bipartisan legislation, but he then walked back those comments. The Biden administering and grant awardees have touted the legislation as a job-creating machine.
Intel’s struggles have increased significantly this year. The attendance posted a nearly $17 billion loss last quarter and has been dialing back Gelsinger’s ambitious systems worldwide.
Intel announced earlier this year it would trim 15,000 jobs via layoffs and voluntary buyouts. It has dream up moves to make its foundry business more easily separable from its legacy business, and has been working with advisors on activist defense and a broader cardinal review, people familiar with the matter previously said. Intel is also seeking to raise cash via a minority chain a fence in in the Altera business, CNBC previously reported, and has been sounding out interested acquirers for weeks.
It may also be staring down a in a trice unthinkable prospect: a potential takeover bid from an ascending Qualcomm, which has a market cap that now dwarfs Intel’s.
