Intel is close to finalizing an $8 billion grant under the CHIPS Act with the U.S. Commerce Department. This funding will support Intel's factory-building initiatives and is seen as crucial for the company's strategy to regain its position in the semiconductor industry.
In addition to the CHIPS Act grant, Intel is also set to secure a $3 billion contract to manufacture chips for the Department of Defense. Despite these potential lifelines, Intel has faced challenges and setbacks, including a significant loss of nearly $17 billion in the last quarter. The company has had to reassess its plans, including reducing its workforce by 15,000 through layoffs and voluntary buyouts. Intel has also explored options to raise cash, such as selling a minority stake in its Altera business.
The company's struggles have led to speculation about a possible takeover bid from Qualcomm. The CHIPS Act, aimed at stimulating domestic semiconductor manufacturing and job creation, has been a focus for the Biden administration. However, it has faced political scrutiny, with some suggesting a potential repeal. Intel has expressed frustration with the delays in receiving CHIPS Act funds and has yet to receive any cash awards. The recent grant awarded to Taiwan Semiconductor Manufacturing Company (TSMC) has increased expectations for similar funding for Intel.
As Intel navigates these challenges, the implications for the semiconductor market and U.S. manufacturing will be significant.