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The US Commerce Department has awarded Intel “up to” a finalized $7.9 billion under the CHIPS and Science Act to spur domestic chip manufacturing.
The grant is meant to “directly support” Intel’s plans to expand production, including a US investment worth almost $90 billion by 2030. The money is contingent on Intel completing key milestones.
The funding is meant to aid manufacturing in Arizona, New Mexico, Ohio, and Oregon. On top of keeping production within the US, the award theoretically backs 10,000 factory jobs as well as 20,000 construction roles.
The amount is reduced from the $8.5 billion originally promised in March, as?The New York Times sources revealed earlier in the week. However, it also follows a $3 billion Defense Department award in September to help with national security.
The aid comes at a crucial moment for Intel. The company recorded its worst-ever quarterly loss in Q3, shedding $16.6 billion. Months earlier, it slashed 15,000 jobs as part of restructuring meant to both trim costs and help regain technological leadership. In the near term, Intel is betting much of its success on an improved 18A chip process due to launch in 2025.
The company has faced some serious technical challenges in recent years, particularly in 2024. Its Core Ultra Series 2 laptop chips (Lunar Lake) and their 200S desktop counterparts (Arrow Lake) aren’t faring well against equivalents from AMD, Apple, and Qualcomm. Its 13th- and 14th-generation Core chips have been plagued by instability problems, While Intel still dominates CPU market share, it’s losing ground in the premium sector led by enthusiasts and other demanding users.
The extra cash won’t guarantee an Intel resurgence. While the faster and more efficient 18A process should help it compete, rivals will have their own next-generation processors (such as more Zen 5-based AMD chips and Apple’s M5) the same year.
However, that’s not strictly the point. The CHIPS and Science Act was intended to reduce the reliance on foreign chip design and production, particularly from China. This grant encourages Intel to make more chips on American soil, ideally leading to greater economic stability.
