Los Angeles — The Biden administration plans to cut some of Intel’s $8.5 billion in federal funding for computer chip factories across the United States, according to three people who asked not to be identified discussing private conversations.
The reduction is largely a byproduct of the $3 billion Intel receives to provide computer chips to the military. President Joe Biden announced in March that the company had agreed to provide up to $8.5 billion in direct funding and $11 billion in loans to Intel.
Intel’s funding changes are unrelated to the company’s financial performance or milestones, people familiar with the grant told The Associated Press. In August, the chipmaker announced it would cut 15% of its workforce, or about 15,000 jobs, in an attempt to rebuild its business to compete with more successful rivals like Nvidia and AMD.
Unlike some rivals, Intel also manufactures chips in addition to designing them.
Two years ago, President Biden praised Intel as a job creator with plans to open a new factory near Columbus, Ohio. The president praised the company’s plan to “build the workforce of the future” for the $20 billion project, which will create 7,000 construction jobs and 3,000 full-time jobs, with an average annual wage of He said it would cost $135,000.
The California-based tech giant’s funding is tied to sweeping 2022 legislation celebrated by President Biden aimed at reviving U.S. semiconductor manufacturing. The $280 billion package, known as the Chips and Science Act, would provide military technology and science while minimizing the kinds of supply disruptions that occurred when the chip shortage stalled in 2021 after the coronavirus pandemic began. The goal is to further strengthen America’s dominance in manufacturing. Factory assembly lines and accelerating inflation.
The Biden administration helped enact the bill following pandemic-era concerns that losing access to Asian chips could push the U.S. economy into recession. In pushing for investment, lawmakers expressed concern that China is trying to take control of Taiwan, which accounts for more than 90% of advanced computer chip production.
In August, the administration pledged up to $6.6 billion to help the Taiwanese semiconductor giant expand a facility it was already building in Arizona, allowing it to produce cutting-edge microchips domestically for the first time. The Commerce Department said the funding to Taiwan Semiconductor Manufacturing means the company can expand its existing plans to build two facilities in Phoenix and add a newly announced third production site. .
The administration has pledged tens of billions of dollars to help build U.S. chip foundries and reduce dependence on Asian suppliers, which the U.S. government views as a security weakness.
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Bork reported from Washington.
