Intel Corporation (NASDAQ:INTC) is expected to see its funding under the CHIPS Act drop to below $8 billion from $8.5 billion, the NYT report said, citing people familiar with the grant. The report said the final contract had not yet been signed.
Intel is the biggest recipient of support from the CHIPS Act.
The decision to reduce the grant comes after Intel delayed some of its planned investments in chip factories in Ohio. The project is now expected to be completed by 2030, instead of 2025.
This came after the chipmaker clocked a record-high quarterly loss and flagged dwindling cash levels, amid heightened competition in the chip industry, especially from Taiwan’s TSMC (NYSE:TSM).
Intel has struggled to convince investors that its technology is as advanced as TSMC, and has also lagged the Asian giant in overall capacity. Intel has also largely lagged market darling NVIDIA Corporation (NASDAQ:NVDA) in capitalizing on heightened chip demand from the fast-growing artificial intelligence industry.
The Commerce Department recently finalized a $6.6 billion grant for TSMC, as it builds a major production plant in Arizona.
The CHIPS Act was an initiative by the Biden Administration to bring chip technology and manufacturing back to the U.S., with a $52.7 billion program that was unveiled in 2022.
But the future of the act is now uncertain under President-elect Donald Trump, who had criticized the act.
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