Intel will get less than $8 billion from the U.S. government rather than $8.5 billion in subsidies. The cause is said to be a contract Washington signed with the chipmaker that already involved $3 billion.
Intel was to get nearly $20 billion in the original CHIPS Act plan. $8.5 billion was a subsidy, while $11 billion was loaned to build a chip factory in Arizona. However, the subsidy has shrunk, according to anonymous New York Times sources. This is because the United States has now signed a contract with Intel to manufacture chips for military purposes. This deal is worth $3 billion while requiring a smaller contribution through the CHIPS Act.
Restructuring
It is unclear why this construction was chosen. However, the suggestion that Intel is getting less money because it has downsized its chip plans seems false. A more logical explanation is that actual money is hard to come by through the CHIPS Act. A conventional contract should pose fewer problems. After all, for the US contract, Intel will simply act as a supplier, while for the CHIPS Act, it is a recipient of subsidies.
The U.S. chipmaker is still in dire straits, but its shares have stabilized. After a rock-bottom price drop, Intel’s stock market value has risen 8 percent in the past month. Nevertheless, an Intel share is still worth nearly 50 percent less than a year ago. The new boost will have to come from future chips based on high-NA EUV machines and revenue from Intel Foundry, which is now a separate business unit.