New York: The U.S. government plans to lower Intel Corp’s previously announced $8.5 billion federal grant for chip manufacturing to less than $8 billion, according to a report by the New York Times on Sunday. The adjustment considers a $3 billion contract Intel received to produce chips for the Pentagon, the report noted, citing unnamed sources.
Earlier this year, President Joe Biden’s administration unveiled plans to award Intel approximately $20 billion in grants and loans to bolster domestic semiconductor production. This included a preliminary agreement for $8.5 billion in grants and up to $11 billion in loans to fund new factory construction and modernization in Arizona.
The funding comes under the 2022 CHIPS and Science Act, aimed at enhancing domestic semiconductor manufacturing. The act allocated $52.7 billion for the sector, including $39 billion for production subsidies and $11 billion for research and development initiatives.
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Intel’s grant reduction reflects a recalibration of U.S. efforts to balance support for its semiconductor industry with fiscal considerations, as domestic chip production becomes increasingly strategic amid global supply chain concerns.
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