US Government Expected to Finalize $8.5 Billion Funding for Intel by Year's End

Intel Corp (INTC.O) and the US government are in advanced discussions to secure $8.5 billion in direct funding by the end of 2024, as reported by the Financial Times on Friday.

The agreement, aimed at boosting domestic semiconductor production, could be finalized before the year ends.

According to sources familiar with the discussions, while the talks are progressing, there is no certainty that the deal will be completed before year’s end. The negotiations come as Intel seeks to regain its footing in the global semiconductor market. However, any acquisition of Intel or part of its business could potentially disrupt the ongoing talks.

Earlier this year, US President Joe Biden awarded Intel nearly $20 billion in grants and loans to strengthen domestic semiconductor chip production. This preliminary agreement includes $8.5 billion in grants and up to $11 billion in loans to support Intel’s operations in Arizona, where the company plans to build two new factories and upgrade an existing facility.

Additionally, Reuters reported earlier this month that Qualcomm had approached Intel to explore a potential acquisition of the company, which has been facing increased competition.

Once a dominant player in the semiconductor industry, Intel has lost its manufacturing advantage to Taiwan Semiconductor Manufacturing Co (TSMC) (2330.TW). The company also fell behind in the generative artificial intelligence chip market, which has been capitalized on by rivals Nvidia (NVDA.O) and AMD (AMD.O).