US awards $7.86 billion to boost Intel chip production

Intel has secured a $7.86 billion subsidy from the US Commerce Department to bolster its domestic semiconductor production. The revised figure is lower than the $8.5 billion initially announced in March, following Intel’s receipt of a $3 billion Pentagon award. The funding will support key projects in Arizona, New Mexico, Ohio, and Oregon, advancing the nation’s chip-making capabilities.

Commerce Secretary Gina Raimondo highlighted the deal as a step towards revitalising US manufacturing. She emphasised the importance of having American-designed chips produced domestically, benefiting national security and economic growth. Intel will receive at least $1 billion of the subsidy by the year’s end, having met key project milestones.

The grant is part of a broader $52.7 billion initiative under the 2022 CHIPS Act, aimed at strengthening the US semiconductor industry. While Intel declined an $11 billion low-cost loan offered earlier, the company plans to leverage a 25% Treasury Investment Tax Credit for investments exceeding $100 billion. Intel CEO Pat Gelsinger noted bipartisan support for the sector’s growth, calling it vital for America’s future.

The award comes with strict conditions, including a five-year prohibition on stock buybacks and requirements to share excess profits. Raimondo reassured that these safeguards are designed to protect taxpayers, with additional awards expected in the coming weeks.