Intel to receive major US funding boost for semiconductor production

Intel and the US government are expected to finalise a direct funding package of $8.5 billion by the end of this year to increase domestic semiconductor production. The funding is part of a larger $20 billion commitment from the US government, including grants and loans to expand Intel’s chip manufacturing capabilities in Arizona. The funds will support the construction of two new factories and the modernisation of an existing facility, as the US pushes to strengthen its semiconductor supply chain.

Despite advanced talks, there is no guarantee the deal will be finalised before the year’s end, as potential disruptions, such as a takeover of Intel, could pose risks. Qualcomm recently approached Intel to explore a possible acquisition, adding another layer of complexity to the ongoing discussions. Once a chip manufacturing leader, Intel has struggled in recent years, losing ground to Taiwan Semiconductor Manufacturing Company and missing out on opportunities in the AI chip market dominated by competitors like Nvidia and AMD.

The US government’s funding initiative reflects a broader strategy to revitalise American chip production amid global supply chain challenges. President Joe Biden’s administration has prioritised strengthening domestic technology industries, and this substantial financial commitment to Intel underscores the government’s determination to regain a competitive edge in the semiconductor sector.