The U.S. government is set to reduce Intel Corp’s preliminary federal chips grant from $8.5 billion to under $8 billion, according to a report by the New York Times citing anonymous sources.
The adjustment considers a $3 billion contract Intel was offered to manufacture chips for the Pentagon, the report noted.
Earlier this year, the Biden administration announced a nearly $20 billion package of grants and loans to bolster Intel’s domestic semiconductor production. This move marked the government’s largest investment to support advanced chip manufacturing.
The U.S. had initially agreed to provide Intel with $8.5 billion in grants and up to $11 billion in loans to fund projects in Arizona, including the construction of two new factories and the modernization of an existing facility. These efforts are part of the 2022 CHIPS and Science Act, which allocated $52.7 billion to enhance domestic semiconductor production. The act includes $39 billion in subsidies for manufacturing and $11 billion for research and development.
