Intel locks down $7.86B in funding from US CHIPS Act

Outgoing administration rushes to allocate money ahead of Inauguration Day

Intel has finalized an agreement with the US Department of Commerce to receive up to $7.86 billion awarded via the CHIPS and Science Act, funding that has come into question since the election.

While the sum represents a large chunk of government investment in Intel projects to boost chip manufacturing on US soil, this was reduced from the $8.5 billion previously touted.

The funding awarded to Intel will be directed towards its US semiconductor manufacturing and advanced packaging projects, which include sites located in Arizona, New Mexico, Ohio, and Oregon. Regarding the reduction in funds, reports have claimed this is linked to Gelsinger's company delaying "some of its planned investments in chip facilities in Ohio." Intel also pointed out that under its Secure Enclave program, it has secured a separate $3 billion contract to produce advanced chips for the US military.

As it stands, Intel remains the largest beneficiary of CHIPS Act funding to date, ahead of TSMC, which has so far been granted $6.6 billion. The adjustment shows that things are altering post-election and that recent movements in US politics are having an impact on affairs.

The CHIPS Act is expected to create over 125,000 jobs across 20 states to increase US semiconductor manufacturing. The Commerce Department says altogether $19 billion of the over $36 billion in proposed incentives funding has been allocated "to date."

There has been uncertainty surrounding the CHIPS Act as it seems the current administration is keen to get things done ahead of Inauguration Day on January 20, 2025. Comments made by US Secretary of Commerce Gina Raimondo suggested that the Biden-Harris administration is looking to rush through CHIPS Act funding. "I'm driving my team really hard right now. Worked all weekend. I'd like to have almost all of the money obligated by the time we leave," Raimondo said in a recent interview with Politico.

Raimondo added: "That's the goal, and I certainly want to have all the major announcements done as it relates to the big, leading-edge companies."

President-elect Donald Trump called the CHIPS Act "so bad" while appearing as a guest on the Joe Rogan Experience podcast in October, and House Speaker Mike Johnson even suggested the GOP might move to repeal the $280 billion funding bill if the party won a majority in Congress, which it achieved.

Johnson has since walked back his comments, telling The Register that the CHIPS Act was "not on the agenda for repeal," and that "to the contrary, there could be legislation to further streamline and improve the primary purpose of the bill — to eliminate its costly regulations and Green New Deal requirements."

However, the post-election political shift could affect future deals awarded under the CHIPS Act and the broader US semiconductor policy on deals not finalized before the changeover.

Raimondo, speaking about whether she thought Trump's administration might amend deals made prior to the administration change, said: "I don't worry terribly about any of the CHIPS money being rolled back, as you say. I mean, the Commerce Department is somewhat unique in so far as everything we've done and are doing is bipartisan. And the CHIPS Act is a national security program and still has great bipartisan support to this day. In fact, it was, you know, started in some ways in the Trump administration."

For Intel, the finalization of CHIPS Act funding comes at a critical juncture. The company has been grappling with significant delays in its product roadmap that have seen it lose ground to rivals like TSMC and AMD. Intel Foundry Services (IFS) is also still in its infancy. Financial struggles have also led to the recent announcement of a 15 percent workforce reduction, with over 15,000 job cuts as part of a $10 billion cost-saving plan for 2025.

The company pitched itself as central to the US semiconductor manufacturing push by lobbying aggressively for CHIPS Act funding to help underpin its IDM 2.0 strategy. ®