PORTLAND, Ore. — This story is courtesy of the Portland Business Journal, a KGW news partner. Read their story here.
The Biden administration is set to trim Intel's preliminary $8.5 billion federal CHIPS Act award to "less than $8 billion," according to a New York Times report.
Intel (Nasdaq: INTC) has posted big losses since the grant was announced in March, leading to spending cuts, mass layoffs and widespread doubt about its ability to carry out an expensive revitalization and expansion plan pursued by CEO Pat Gelsinger.
The paper, citing unnamed sources familiar with the negotiations, said the planned reduction reflects a $3 billion CHIPS Act award Intel received to support its work for the Defense Department.
But it also "takes into account Intel’s technology road map and customer demand," the Times said.
Company and administration officials declined to comment for the Times story.
Gelsinger recently expressed frustration that it's taken so long to finalize the award.
"It's well over two years since the CHIPS Act passed," he said in an interview with Yahoo Finance late last month. "And over that period, I've invested $30 billion in U.S. manufacturing and we've seen $0 from the CHIPS Act. This has taken too long. We need to get it finished."
How far below $8 billion the reduction turns out to be could be telling, although in any case it's another blow to Intel.
The company is trying to build out massive manufacturing capacity and advance its technology to lure customers as a chip foundry.
Intel's announced $8.5 billion award, with $11 billion in loans also part of the preliminary package, was the biggest by the Commerce Department under the CHIPS Act. It was intended to support a $36 billion expansion in Oregon, new Intel fabs in Ohio and Arizona, and an advanced packaging facility modernization in New Mexico. Intel said the total cost of those projects would add up to $100 billion.
