A “big reduction” in 10 billion subsidies? Rumor has it that the Pentagon has terminated the allocation of 2.5 billion US dollars to Intel (INTC.US)

Zhitong Finance ·  Mar 12 20:30

According to reports, the US Pentagon terminated its plan to allocate 2.5 billion US dollars to semiconductor giant Intel (INTC.US).

The Zhitong Finance App learned that the media quoted people familiar with the matter as saying that the US Pentagon terminated its plan to allocate 2.5 billion US dollars to semiconductor giant Intel (INTC.US) and placed responsibility for bridging the gap to the US Department of Commerce. According to information, the US government allocated 3.5 billion US dollars to Intel to produce advanced semiconductors related to defense and intelligence projects. The US Department of Commerce, which is responsible for funding under the Chip and Science Act, was previously only responsible for 1 billion US dollars of it.

The report said that the deal will make Intel a dedicated supplier of processors for military and intelligence applications, and may establish a “secure enclave” (secure enclave) within Intel's chip factory. According to reports, with the Pentagon's exit, the benefits Intel and others receive from the chip bill may change.

The media reported last month that the US government is discussing providing more than 10 billion US dollars in subsidies to Intel. This will be the largest financial subsidy in the US government's plan to guide the semiconductor manufacturing industry back to the US.

Intel CEO Pat Gelsinger said last month that the company would receive a payment “soon” from the US government, but did not provide an exact timeline.

According to information, US President Joe Biden signed the $53 billion “Chip Act” in August 2022 to strengthen the US semiconductor manufacturing industry. However, the Biden administration has been slow in disbursing funds to companies applying for grants.

BAE Systems (BAESY.US) became the first company to receive chip law funding, receiving $35 million in December 2023 to modernize its New Hampshire microelectronics center.

Microchip Technology (MCHP.US) received $162 million in January of this year, including $90 million to improve its plant in Colorado and another $72 million to expand its plant in Gresham, Oregon.

Last month, GFS.US received $1.5 billion to expand its existing fab in Malta, New York.

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