Biden admin reducing Intel chip grant below $8B: reports

The Biden administration is expected to trim the amount of federal grant funding Intel was originally anticipated to receive from the CHIPS and Science Act after the semiconductor maker won a significant defense contract, according to multiple reports.

The Commerce Department in March announced a proposal for Intel to receive $8.5 billion in grants for its commercial semiconductor projects in Arizona, New Mexico, Ohio and Oregon, under the law passed in 2022. But that amount has been reduced to less than $8 billion, the New York Times reported Sunday, citing four sources.

Reuters reportedly separately on Monday that Intel is expecting a “small reduction” in the award, according to one source.

Both outlets said the adjustment was made after Intel won a $3 billion contract in September to supply semiconductors for the U.S. military. 

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Intel declined to comment on the situation when reached by FOX Business on Monday, but a spokesperson said the company is very close to finalizing its deal and will share details soon.

The U.S.-based chipmaker is expected to be the chief beneficiary of the tens of billions in taxpayer subsidies allocated under the bipartisan CHIPS Act passed two years ago. 

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But so far, the company has not received any funds as it worked to meet the government’s requirements – and instead of creating the jobs promised under the policy, it has slashed its workforce by 15%.

Intel’s stock is down more than 47% year to date. Shares were up more than 2% in early afternoon trading on Monday, hovering around $25.