Intel in trouble? The government is reducing subsidies
The American giant in the semiconductor production market, better known for its processors and graphics cards, must come to terms with smaller subsidies and loans.
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The US government has made up its mind reduce the proposed federal subsidy to Intel from $8.5 billion to less than $8 billion. This decision is partly due to contract worth $3.5 billionwhich the Blues secured for the production of chips for the Pentagon. Despite the reductions, Intel will still receive more government funding than any other manufacturer under the bill CHIPS and Science Act.
Intel remains a key company for the US
The Biden administration had previously pledged to deliver almost $20 billion in the form of funding and loans to Intel to help expand its U.S. operations. It was to be used for construction of new production plants in Arizona, New Mexico, Ohio and Oregon.
Despite significant financial support, Intel has delayed its Ohio campus project. Originally scheduled for completion in 2025, it is currently scheduled for the end of the decade. The reason is uncertainties related to demand for chips produced in the United States.
To remedy this situation, the Secretary of Commerce Gina Raimondo has established cooperation with technology giants such as Apple, Google and Microsoftencouraging them to buy US-made chips. Microsoft already has an agreement with Intel Foundrywhile Apple has been almost exclusively using services for years TSMC.
Despite the challenges, Intel remains a key element in the U.S. government’s push to modernize and expand the domestic semiconductor industry. As the only American company producing chips in the most advanced lithography, Blue is a natural partner for government orders.
The company’s latest technology, known as Intel 18Ais expected to enter mass production in 2025 and is expected to be the most advanced semiconductor manufacturing process in the U.S. for quite some time. Especially since TSMC cannot export its latest processes abroad.
