The Biden administration has awarded Intel $7.865 billion under the CHIPS Act to enhance domestic semiconductor production in the United States. The U.S. Department of Commerce confirmed the agreement, making it the largest allocation under the CHIPS Act so far, though slightly less than the $8.5 billion initially earmarked for Intel in March.
White House Deputy Chief of Staff Natalie Quillian highlighted the significance of this investment, stating, “Today’s award marks another key step in implementing President Biden’s CHIPS and Science Act and the Investing in America agenda to reshore manufacturing, create thousands of good-paying jobs, and strengthen our economy.”
The funding will support the construction and expansion of Intel’s semiconductor fabrication facilities in Arizona, New Mexico, Ohio, and Oregon. These projects are expected to generate up to 30,000 jobs across the four states. According to the Wall Street Journal, Intel is set to receive at least $1 billion of the allocated funds later this year. As part of the agreement, the chipmaker has committed to refraining from stock buybacks for the next five years.
The amount of funding Intel received was influenced by several factors. The New York Times reported that Intel had already secured a $3 billion contract in September to develop chips for U.S. government use in national security and military applications. Additionally, some of Intel’s project timelines extended beyond the government’s 2030 deadline, resulting in a reduction in the CHIPS Act funding allocated to the company.
Despite receiving this significant investment, Intel has scaled back some of its previous expansion plans. For instance, its Ohio facility is now expected to create 6,500 jobs, a decrease from the original estimate of 10,000. Furthermore, the company has revised its planned investment in U.S. manufacturing from $100 billion over the next five years to $90 billion by the end of the decade.
The funding arrives at a challenging time for Intel, which has been grappling with various setbacks. The company faced delays in its next-generation 18A manufacturing process, laid off over 15,000 employees, and reported a staggering $16.6 billion loss in its most recent quarterly report—the largest in its history since its founding in 1968. Moreover, Intel reportedly attracted interest from Qualcomm as a potential acquisition target, though these discussions have reportedly cooled.
This latest CHIPS Act award marks progress in the Biden administration’s broader goal of revitalizing U.S. semiconductor manufacturing. With Intel’s agreement in place, the U.S. Commerce Department has now finalized deals with six companies, distributing a total of $19 billion from the $39 billion allocated for CHIPS Act funding.
More announcements are expected in the coming weeks, as the Commerce Department faces a tightening timeline to allocate the remaining funds. These developments come amidst uncertainty about the CHIPS Act’s future, with the upcoming administration signaling plans to potentially roll back the program.