Intel’s CHIPS Funding Reportedly Reduced

The New York Times reports that Intel will receive less funding from the CHIPS Act than originally planned because of the microprocessor maker’s business struggles.

The Biden administration signed the bipartisan CHIPS and Science Act into law in 2022. It was meant to spur U.S.-based semiconductor research and manufacturing to counter the country’s reliance on China and improve the supply chain weaknesses that were exposed in the wake of the COVID pandemic. Intel is the biggest recipient of funding and subsidies under the act, and it was originally slated to receive $8.5 billion of the $39 billion authorized by the government, plus $11 billion in loans.

It’s not clear if the loans are impacted, but Intel will now receive less than $8 billion in funding, according to multiple sources cited by the New York Times. According to the publication, Intel’s promised investments in chip fabrication facilities in Ohio, Arizona, New Mexico, and Oregon have been scaled back because of the company’s financial troubles. And now the Biden administration is worried that the company might not survive to finish the work.

Intel announced in January 2022–just before the CHIPS Act was ratified–that it would invest $20 billion in new chip fabrication facilities in Ohio, creating 3,000 jobs by the time the first facility came online in 2025. But now Intel has delayed that work to the end of the decade as it tries to reduce costs to help it weather its financial issues. In doing so, it failed to meet specific funding deadlines, triggering an accountability-based reduction in its CHIPS-based payments.

Chip fabrication giant TSMC hasn’t had any issues getting funding under the CHIPS act: The U.S. Commerce Department completed a $6.6 billion grant to the firm earlier this month, with TSMC pledging to invest $65 billion of its own money in U.S.-based chip fabrication facilities.

Intel also has a $3 billion contract with the government to make chips for the military. That contract is unaffected by the changes.