US Grants $8B in Subsidy to Intel for Strengthening Domestic Manufacturing

The U.S. Commerce Department has finalized a $7.86 billion government subsidy for Intel, slightly reduced from the $8.5 billion initially announced in March 2024. The reduction reflects Intel's separate $3 billion Pentagon contract, funded under the same CHIPS and Science Act budget. This subsidy forms part of the broader effort under the 2022 CHIPS and Science Act, which allocated $52.7 billion to strengthen the domestic semiconductor industry, including $39 billion for production and $11 billion for research.

The funding will support Intel’s expansive $90 billion manufacturing projects in Arizona, New Mexico, Ohio, and Oregon. These projects aim to bolster the U.S. semiconductor supply chain by enabling American-designed chips to be manufactured domestically. Intel has already achieved some initial project milestones, and the company will receive at least $1 billion of the subsidy by December 2024. The company also plans to leverage the Treasury Investment Tax Credit, which could provide up to 25% reimbursement for qualified investments exceeding $100 billion.

Commerce Secretary Gina Raimondo described the subsidy as critical for restoring U.S. technology and manufacturing leadership while ensuring accountability in the use of taxpayer dollars. Intel CEO Pat Gelsinger underscored the bipartisan support for these investments, calling them vital for the country's long-term economic growth and national security.

This subsidy represents the largest award to date under the CHIPS Act, highlighting its importance in reducing U.S. reliance on foreign semiconductor supply chains. It comes at a time of growing geopolitical tensions and reflects the government’s commitment to revitalize domestic chip manufacturing capabilities. As the sixth award finalized under the CHIPS Act, it paves the way for further investments in American semiconductor production in the coming weeks.