Vixe: Intel will receive less money from the US government for chip production

The United States government announced a reduction in the proposed subsidy for the Intel, which initially envisaged an investment of US$8.5 billion through the program CHIPS and Science Act. Now, the amount has been adjusted to less than US$8 billion. This reduction is due, in part, to a US$3.5 billion contract that Intel signed with the Pentagon to produce chips intended for military and national security applications, according to information from the New York Times.

Federal Support and Pentagon Contracts

Earlier this year, the Biden administration had committed about $20 billion in subsidies and loan guarantees to Intel as part of the effort to boost domestic semiconductor production. This package included:

• $8.5 billion in federal subsidies;
• Up to $11 billion in loan guarantees;
• Additional $3.5 billion from the Department of Defense for the manufacture of chips aimed at military and intelligence agencies.

With the military contract and CHIPS Act funding, Intel has already accumulated more than $10 billion in federal support. However, the company faces significant challenges, including the postponement of its expansion project in Ohio, which is now scheduled to be completed by the end of the decade rather than 2025.

Intel has been facing a very difficult phase, marked by important internal reorganizationsif there is a reduction in expenses, such as the cutting of 15 thousand jobs in Augusto. The financial statement for the third quarter again recorded a lossa situation that was already expected by the company; The Core family chip giant projected, in the announcement of the layoff of 15 thousand employees, that the second half of the year would be more difficult than expected.

Demand Concerns and Government Initiatives

Faced with delays and uncertainty about demand for U.S.-made chips, the Commerce Department has expressed concerns about Intel’s ability to meet the goals set by the program. In response, Commerce Secretary Gina Raimondo has been talking to companies like Apple, Google and Microsoft to encourage them to purchase locally produced semiconductors.

Among the technology giants:

• Microsoft already has supply contracts with Intel Foundry;
• Appleon the other hand, has relied almost exclusively on TSMC for years.

Intel is a key player in the US government

Even with the subsidy reduction, Intel remains a key player in the US strategy to modernize the semiconductor industry. As the only American manufacturer capable of producing cutting-edge chips in nodes, the company maintains its privileged position to fulfill government contracts. The company is a fundamental part of the government’s strategy to reduce dependence on external suppliers as much as possible, in addition to continuing its mission to limit China’s access to fundamental technologies for chip manufacturing.

Your technology 18Aexpected to enter mass production in 2025, is expected to become the most advanced in the United States in the coming years, surpassing the capabilities of TSMC, which faces restrictions in exporting its latest nodes.