Wednesday, September 11th 2024
US Government Could Delay $8.5 Billion CHIPS Act Funding for Intel
The $8.5 billion in CHIPS Act assistance intended for Intel from the US government is expected to be delayed due to the company's ongoing financial struggles. According to a Bloomberg report, the Department of Commerce rejected the initial allocation request, requiring Intel to meet specific objectives and complete a comprehensive due diligence process before the funds are released.
Intel has committed to remaining engaged in discussions despite the additional requirements, though it encountered regulatory and timing challenges. The terms of the funding include $8.5 billion in direct assistance to Intel, along with $11 billion in low-cost credit, and a 25 percent tax credit worth up to $100 billion for Intel's investments in Arizona, New Mexico, Ohio, and Oregon.
Source:
Bloomberg
Intel has committed to remaining engaged in discussions despite the additional requirements, though it encountered regulatory and timing challenges. The terms of the funding include $8.5 billion in direct assistance to Intel, along with $11 billion in low-cost credit, and a 25 percent tax credit worth up to $100 billion for Intel's investments in Arizona, New Mexico, Ohio, and Oregon.
Intel said in a statement that "we are making significant progress across our US projects in Arizona, New Mexico, Ohio and Oregon, and look forward to finalizing our funding agreement soon."
"We've been working hard to address the issues," CEO Pat Gelsinger told investors at a conference last week. "Like everybody in the industry, we realize we have to operate efficiently with nimbleness, with urgency."Enacted by Congress in July 2022, the CHIPS and Science Act was designed to strengthen the US domestic semiconductor industry, with funding allocated for semiconductor R&D, domestic production, and specialized tooling equipment.
"We recognize that we are operating in one of the most cyclical, intensely competitive industries in the entire world, and that dynamics are going to shift," Mike Schmidt, who runs the Commerce Department's chips office, said in an early August interview when asked about risks to the overall program. "We'll have to be nimble in how we respond to that."
40 Comments on US Government Could Delay $8.5 Billion CHIPS Act Funding for Intel
I remember in 2008-2009 when economy tanked and the government bailed them out and the execs just used the money to give themselves bonuses.
Intel can have revenues of $1 trillion per quarter but if it costs that much to make that much they didn't do anything. This is why Intel is in trouble right now. The cost of making money is much higher than their revenues mainly because they do not have enough business or high enough margins to pay for the operation of so many fabs.
we really need intel to keep everyone in check..
thats how our entire financial system works.
if everyone only invested within their immediate means the worlds gdp would be a couple of billion dollars, not 120 trillion.
amd’s hole sits at ~9 billion, something that will also take years to fill.
I got tired of saying that. There's a reason why they had to resort to layoffs etc.
They started building the fabs on the promise they would receive money, but the timeline from when the government announced the CHIPS act to when it is going to begin disbursing money has been over two years!!!
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In 2020 it looks like they nearly cleared their debt, current debt could be acquisitions
China may be stupid but I doubt they're $4-5 trillion stupid because that's the low end of what I expect the impact to be o_O