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Biden Administration in Talks to Provide Over $10 Billion in Subsidies to Intel Corp for Semiconductor Manufacturing

Washington, February 17, 2024, The Europe Today: Biden administration is currently engaged in negotiations to award Intel Corp more than $10 billion in subsidies, as reported by Bloomberg News on Friday. Citing sources familiar with the matter, the award package under discussion is expected to include a combination of loans and direct grants.

The U.S. Department of Commerce, responsible for overseeing the distribution of funds allocated under the CHIPS Act, has neither confirmed nor denied the ongoing negotiations. Both the Department and Intel declined to provide comments on the matter.

The CHIPS Act, a $39 billion program aimed at bolstering semiconductor manufacturing, has already seen the announcement of two smaller grants. U.S. Commerce Secretary Gina Raimondo revealed earlier this month that the department plans to make several funding awards within the next two months. The intended purpose of the semiconductor fund is to subsidize chip production and support investments in the related supply chain, ultimately aiding in the construction of new factories and increasing production capacity.

Intel has ambitious plans to invest tens of billions of dollars in chip factories, including expansion at existing sites in Arizona and New Mexico, as well as the establishment of a new site in Ohio, touted as a potential contender for the world’s largest chip plant. However, recent reports from the Wall Street Journal suggest that Intel might delay the completion of the Ohio facility until 2026 due to market dynamics and a slower disbursement of federal funds.

The timeline for Intel’s projects and those of other major players in the semiconductor industry, such as Taiwan Semiconductor Manufacturing Co (TSMC), Micron, and Samsung Electronics, remains uncertain. TSMC, in particular, has a chip factory under construction in Arizona, which has faced delays. The impact of the potential influx of federal dollars on these projects remains to be seen.

As the semiconductor industry continues to navigate challenges and opportunities, the proposed subsidies to Intel underscore the Biden administration’s commitment to fostering domestic chip manufacturing and reinforcing the critical semiconductor supply chain.