Discussions between Intel and Washington D.C. regarding an $8.5 billion CHIPS Act award are at an advanced stage: The company may start receiving direct funds before the end of 2024, sources familiar with the matter tell the Financial Times.
Intel is the biggest recipient of America’s largest semiconductor investment in history. But it faced funding delays as the White House reportedly wanted more information on its plans. The company recently fought financial headwinds due to a $1.6 billion loss in 2Q24.
Progress is underway, even as Intel cuts costs by slashing jobs and putting projects on hold. And with a presidential election this November, the Biden-Harris administration is likely keen to get the largest recipient of one of its headline policies moving forward. This still does not guarantee that Intel will receive its funds before 2025, however.
Officials are also concerned about whether Intel will sell any part of its business, with news that the company is considering cutting assets to stay afloat. There are also rumors that Qualcomm is interested in acquiring some parts of Intel, but sources say that such moves could derail the delicate negotiations. Even so, the company and the Department of Commerce stayed mum on the issue.
The CHIPS Act award will give Intel a much-needed cash boost, especially as the company struggles to stay afloat. In addition to the $8.5 billion in direct investment, the CHIPS Act will include $11 billion in loans and a 25% investment tax credit of up to $100 billion. The company has already received $3 billion in Secure Enclave funding for military chips. With Apollo Global Management Inc., an American asset management firm offering a $5 billion investment, Intel seems ready to turn things around.
These are all good news for Intel, but it’s still not out of the woods. Hopefully, the company could recover sooner rather than later, allowing it to regain its footing as a solid competitor in the semiconductor space.
