Intel Awarded Nearly $8 Billion For US Chip Factories

The US Department of Commerce awarded Intel nearly $8 billion in direct funding under the CHIPS Incentives Program’s Funding Opportunity for Commercial Fabrication Facilities. This follows the preliminary memorandum of terms signed earlier this year and comes as the Biden-Harris administration rushes to deliver billions of dollars in federal grants and loans to favored companies before President-elect Trump assumes office in early 2025.

The Commerce Department’s $7.865 billion award of direct funding under CHIPS will support cutting-edge chip fabrication and advanced packaging at Intel’s projects in Arizona, New Mexico, Ohio, and Oregon. 

“As previously announced and with the Department’s support, Intel’s overall expansion plan is estimated to support approximately 10,000 manufacturing jobs and 20,000 construction jobs across all four states,” the Commerce Department wrote in a statement. 

White House Deputy Chief of Staff Natalie Quillian said Intel’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.” 

“Intel’s investments across the country demonstrate once again how President Biden’s Investing in America agenda is delivering for the American people,” Quillian pointed out. 

Data from Bloomberg shows Intel has received a significant portion of CHIPS funding so far (this includes a $3 billion grant to make advanced chips for the military)…

The Commerce Department noted the award will support Intel’s efforts to invest $90 billion in US chip operations by the end of the decade, which is part of a massive $100 billion expansion plan. The Department will disburse the funds based on project milestones. 

However, Intel is in dire financial straits. It posted a $17 billion loss in the third quarter, the largest quarterly loss in its 56-year history.

Intel CEO Pat Gelsinger recently outlined the chipmaker’s ambitious turnaround plan. With shares down 50% year-to-date, the CEO also dialed back global expansion plans and announced job cuts of upwards of 15,000. 

The Commerce Department is likely to complete as many chip awards as possible through the end of the year, as the future of the program remains in question ahead of the incoming Trump administration. 

In a late-October interview with Joe Rogan, Trump criticized the CHIPS program as “so bad” and planned to have Republicans revise or even repeal the legislation. 

Trump and Joe Rogan discuss iPhones, chip manufacturing, why it isn’t happening in the USA and tariffs.

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— Wall Street Mav (@WallStreetMav) October 26, 2024

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