Washington Curtails Intel’s Chip Grant After Company Stumbles
The Biden administration is reducing its award to the chip maker, partly to account for a multibillion-dollar military contract.
Tripp Mickle, who reports from San Francisco, and Ana Swanson, who reports from Washington, have been covering the CHIPS Act since 2022.
The Biden administration plans to reduce Intel’s preliminary $8.5 billion federal CHIPS grant, a move that follows the California-based company’s investment delays and broader business struggles.
Intel, the biggest recipient of money under the CHIPS Act, will see its funding drop to less than $8 billion from the $8.5 billion that was announced earlier this year, four people familiar with the grant said. They all spoke on the condition of anonymity because the final contract had not yet been signed. The change in terms takes into account a $3 billion contract that Intel has been offered to produce chips for the U.S. military, these people said.
The government’s decision to reduce the size of the grant follows Intel’s move to delay some of its planned investments in chip facilities in Ohio. The company now plans to finish that project by the end of the decade instead of 2025. The chip maker has been under pressure to reduce costs after posting its biggest quarterly loss in the company’s 56-year history.
