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After a two year wait, Intel is finally going to receive nearly $7.9 billion from the US government to bolster the company’s chip manufacturing in the country.
On Tuesday, the Biden administration announced the $7.865 billion in funding to Intel through the US CHIPS and Science Act, which was passed in 2022 to boost domestic semiconductor manufacturing.
The money will go toward Intel’s plans to expand its chip production in Arizona, New Mexico, Oregon and Ohio, where the company is developing an upcoming $20 billion manufacturing hub to churn out next-generation processors.
In a statement, Intel’s CEO Pat Gelsinger also said “leading-edge semiconductors are once again being made on American soil,” citing the arrival of the company’s 18A manufacturing process, which is slated to launch next year. Importantly, Gelsinger views 18A as the company’s way to regain chip leadership from rival TSMC, which builds processors for Apple, Nvidia, AMD and even some of Intel’s own products.
The funding represents a crucial win for Intel following a tough year amid slowing chip sales, high costs and growing competition. In 2024, Intel announced major layoffs and had to respond to a voltage bug in “Raptor Lake” desktop processors that’s been turning some consumers away from the company's chips.
Reportedly, Gelsinger had been complaining about the Biden administration moving too slow to distribute the funds, blaming it on “bureaucratic” delays. However, the $7.9 billion amount is lower than the $8.5 billion that the Biden administration had originally planned on giving to Intel.
According to The New York Times, Intel’s recent financial struggles had complicated the negotiations with the US’s Department of Commerce on finalizing the funding amount. The department then decided to lower the award, citing a separate $3 billion contract Intel had been awarded in September to produce chips for the US military.