In March, Intel announced a preliminary agreement with the feds for $8.5 billion in CHIPS Act funding. The finalized award announced Tuesday is not quite that high, at about $7.86 billion.
The cut is reported to be a byproduct of funding Intel is also receiving to provide computer chips to the military. In August, the company reduced its workforce by about 15,000 jobs in an attempt to compete with tech companies Nvidia and AMD.
About half of the funding is directed at Intel’s operations in Chandler. The money is expected to create 10,000 manufacturing and construction jobs.
Intel will use the funds to build two new factories manufacturing its most advanced chips, as well as modernizing its existing plant.
The changes to Intel’s funding are not related to the company’s financial record or milestones, the people familiar with the grant told The Associated Press. In August, the chipmaker announced that it would cut 15% of its workforce — about 15,000 jobs — in an attempt to turn its business around to compete with more successful rivals like Nvidia and AMD.
Unlike some of its rivals, Intel manufactures chips in addition to designing them.
Two years ago, President Joe Biden hailed Intel as a job creator with its plans to open a new plant near Columbus, Ohio. The president praised the company for plans to “build a workforce of the future” for the $20 billion project, which he said would generate 7,000 construction jobs and 3,000 full-time jobs set to pay an average of $135,000 a year.
The California-based tech giant's funding is tied to a sweeping 2022 law that President Biden has celebrated and which is designed to revive U.S. semiconductor manufacturing. Known as the CHIPS and Science Act, the $280 billion package is aimed at sharpening the U.S. edge in military technology and manufacturing while minimizing the kinds of supply disruptions that occurred in 2021, after the start of the coronavirus pandemic, when a shortage of chips stalled factory assembly lines and fueled inflation.
The Biden administration helped shepherd the legislation following pandemic-era concerns that the loss of access to chips made in Asia could plunge the U.S. economy into recession. When pushing for the investment, lawmakers expressed concern about efforts by China to control Taiwan, which accounts for more than 90% of advanced computer chip production.
In August, the administration pledged to provide up to $6.6 billion so that a Taiwanese semiconductor giant could expand the facilities it is already building in Arizona and better ensure that the most advanced microchips are produced domestically for the first time. The Commerce Department said the funding for Taiwan Semiconductor Manufacturing Co. meant the company could expand on its existing plans for two facilities in Phoenix and add a third, newly announced production hub.
The administration has promised tens of billions of dollars to support construction of U.S. chip foundries and reduce reliance on Asian suppliers, which Washington sees as a security weakness.
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