Intel Close To Securing $8.5 Bn Funding Agreement With U.S. Government
Concerns persist that Qualcomm's rumoured interest in acquiring Intel could disrupt ongoing negotiations
Intel is nearing completion of a USD 8.5 billion direct funding agreement with the US government, which could be concluded by the end of the year, according to the Financial Times. The investment, part of a larger initiative to enhance domestic semiconductor manufacture, is still being negotiated, with no assurance of completion until 2024. Concerns remain that a prospective purchase of Intel, following Qualcomm's rumoured interest in acquiring the chipmaker, might derail the ongoing negotiations.
The United States Department of Commerce and Intel have yet to reply to requests for comment on the transaction. In March, President Joe Biden handed Intel roughly USD 20 billion in grants and loans, with the goal of boosting US semiconductor manufacturing in the face of increased global competition. This early funding includes USD 8.5 billion in subsidies and up to USD 11 billion in loans, with the goal of building two new plants and modernising an existing one in Arizona.
Intel, formerly a dominant force in chip manufacturing, has lost its competitive advantage to Taiwan Semiconductor Manufacturing Company (TSMC) and has failed to stay up with the rise of generative AI chips from competitors such as Nvidia and AMD. Qualcomm's proposed acquisition of Intel, as revealed earlier this month, shows the company's rising hurdles in restoring market supremacy.
The US government's financial initiatives are part of a bigger campaign to enhance domestic chip production in response to global supply chain disruptions and a growing reliance on foreign suppliers. Intel's Arizona projects are likely to play an important role in the company's efforts to re-establish itself in the highly competitive semiconductor market.
