The Biden administration has finalized a $7.86 billion grant to Intel under the CHIPS Act, reducing the semiconductor giant’s preliminary award of $8.5 billion announced earlier this year.
The adjustment reflects Intel’s recent $3 billion military contract and revised investment timelines, according to the US Department of Commerce. The funding, part of the administration’s broader push to revitalize domestic semiconductor manufacturing, will support Intel’s projects in Arizona, New Mexico, Ohio, and Oregon.
Intel, the largest recipient of CHIPS Act funds to date, will receive at least $1 billion of its award by the end of 2024. The decrease from the initial grant reflects the company’s additional federal funding for secure facilities producing military-grade microchips. The Commerce Department emphasized that the reduction was unrelated to Intel’s revised investment and employment projections.
Intel’s updated plans include investing $90 billion in US-based projects by the end of the decade, down from the $100 billion it previously pledged over five years. Additionally, the company now expects to create 6,500 jobs in Ohio, 3,500 fewer than initially estimated. Intel’s first Ohio chip plant is expected to be operational by 2030, a delay from the original target of 2025.
The CHIPS Act, passed in 2022 with bipartisan support, allocates $52 billion in grants and billions more in tax incentives to bolster U.S. chip manufacturing. The initiative aims to reduce reliance on Asian suppliers, especially amid geopolitical tensions with China. Secretary of Commerce Gina Raimondo called the Intel grant a “huge step forward” in rebuilding the US semiconductor supply chain, asserting that the CHIPS Act will help the nation produce 30% of the world’s leading-edge chips by 2032.
Intel remains the only US-based manufacturer of advanced logic chips, placing it at the center of the administration’s strategy to strengthen national security and industrial resilience. The grant funds will be disbursed incrementally as Intel achieves project milestones, such as completing construction and beginning production.
Intel’s grant approval comes during a challenging period for the company, which reported its largest-ever quarterly loss this year amid a slump in global chip sales. CEO Pat Gelsinger is pursuing an ambitious turnaround plan to expand manufacturing and compete with industry leaders Taiwan Semiconductor Manufacturing Company (TSMC) and Samsung.
Despite these efforts, Intel has faced financial pressures, including layoffs and scaled-back projects, while its market valuation has fallen significantly from its early 2000s peak. The Commerce Department acknowledged Intel’s ongoing commitment to US semiconductor manufacturing, noting that the company plans to avoid stock buybacks for five years under the grant agreement.
Intel’s grant is part of a broader government initiative to allocate $39 billion in CHIPS Act funding for domestic manufacturing. Including Intel, six companies have received awards totaling more than $19 billion, with more announcements expected in the coming weeks. These grants aim to strengthen supply chain security and address pandemic-era disruptions.
The New York Times, the Washington Post, the Financial Times, and the Wall Street Journal contributed to this report.
