Intel secures $7.9B in CHIPS Act funding as Biden runs out of time

Simone Del Rosario:

Racing against the clock, the Biden administration finalized nearly $8 billion in funding to Intel as part of the massive CHIPS Act.

The cash was part of an award President Joe Biden announced back in March, touting that America would once again become a major player in semiconductor infrastructure. But Intel is struggling to keep its initial promises.

Joe Biden:

“It’s going to transform the semiconductor industry and create entirely new ecosystems, entirely new research and design and manufacturing and advanced chips in America, by the way, parenthetically, I said, We’re going to become the manufacturing capital world. Again, people looked at him like, Where the hell’s the written saying we’re not gonna be there manufacturing capital world.”

Simone Del Rosario:

Intel’s CHIPS award was reduced by more than half a billion dollars because it also secured a $3 billion defense contract to make semiconductors for the military, according to the Commerce Department.

But it’s Intel’s stumbles that could further affect its CHIPS Act award. The once-great chipmaker’s stock has plummeted nearly 50 percent since the start of the year. The exclamation point on the contentious year so far was reporting a $16.6 billion loss for the third quarter, the largest in the company’s history. It’s been a downward spiral over the decades: Intel’s valuation fell from half a trillion dollars in 2000 to just over $100 billion today.

The issues have even pushed away potential suitors. Back in September Qualcomm approached Intel about a potential takeover. But now, that interest has “cooled,” according to Bloomberg.

The Commerce Department says the company has extended its timelines beyond the government’s 2030 deadline.

Intel plans to invest $90 billion in the U.S. before the end of the decade, after previously promising to spend $100 billion in less time than that. It also reduced the estimated number of jobs it would create in Ohio by about a third.

Taiwan Semiconductor, better known as TSMC, secured $6.6 billion in grants from the CHIPS Act as part of a $65 billion plan to build three fabs in Arizona. In stark contrast to Intel, TSMC will see its first products roll off the line early next year. The semiconductor giant makes chips for the likes of Apple and NVIDIA.

So far, the government has finalized deals with six companies to dole out more than $19 billion of the $39 billion in CHIPS Act funding it plans to give out.

With less than two months left in Biden’s term, Commerce Secretary Gina Raimondo says more awards will be announced in the coming weeks.

Donald Trump:

“We put up billions of dollars for rich companies to come in and borrow the money and build chip companies here, and they’re not going to give us the good companies anyway. All you had to do was charge them tariffs. If you would have put a tariff on the chips coming in, you would have been able to, just like the auto companies, no different, more sophisticated, but no different. You know, Taiwan, they stole our chip business. Okay?”

Simone Del Rosario:

Before the election, House Speaker Mike Johnson said Republicans “probably will” try to repeal the CHIPS Act, but he quickly walked back the lukewarm sentiment after other Republicans pressed him on how important the funding is in their districts.

Now experts say the law will likely stay in place but the Trump Administration is sure to add its own flair.