US Plans to Reduce Intel's $8.5 Billion Federal Chip Grant to Below $8 Billion

According to a report based on unnamed sources from the New York Times, the U.S. government plans to reduce the $8.5 billion federal chip grant awarded to Intel (NASDAQ: INTC) to below $8 billion. Sources speaking to the Times indicated that the change takes into account a proposed $3 billion contract for Intel to produce chips for the Pentagon.

The U.S. had announced that a grant of $8.5 billion and a preliminary agreement for up to $11 billion in loans had been made for Intel in Arizona, with part of the funding intended for the construction of two new factories and the modernization of an existing factory. This expenditure was part of the 2022 CHIPS and Science Act, which proposed a total of $52.7 billion to boost domestic semiconductor production, including $39 billion for semiconductor manufacturing and $11 billion for research and development.