Intel, US government edge closer to $8.5 billion in chip funding
Any takeover of all or part of Intel’s business could risk disrupting the talks, according to a report in the Financial Times.
Intel and the US government will likely finalize USD 8.5 billion in direct funding for the struggling chipmaker before the end of 2024, according to the Financial Times.
Though the discussions are at an advanced stage, there is, however, no guarantee it will be finalized before the end of this year. Any takeover of all or part of Intel’s business could risk disrupting the talks, the report said.
Qualcomm has recently approached Intel to explore a potential acquisition.
British chip firm Arm Holdings also approached Intel about potentially acquiring the company’s product division but was told that the business is not for sale, Bloomberg reported.
The US government awarded Intel nearly USD 20 billion in grants and loans in March to boost its domestic semiconductor chip output. The package is expected to support Intel facilities in Arizona, Ohio, New Mexico and Oregon.
The preliminary agreement was for USD 8.5 billion in grants and up to USD 11 billion in loans for Intel in Arizona, where part of the funding will be used to build two new factories and modernize an existing one.
Intel has also reportedly qualified for a separate USD 3.5 billion in federal grants to make chips for the Pentagon. The secretive program, called Secure Enclave, will lead to the production of advanced chips used for defense and intelligence purposes.
Once the world’s leading chipmaker, Intel ceded its advantage to rivals like TSMC and Nvidia, failing to capitalize on an AI boom.
Last month’s disastrous earnings report reflected the extent of the crisis the company faces, with shares in Intel plummeting. In an effort to cut costs, it has announced a USD 10 billion cost reduction program that includes eliminating thousands of jobs.
