U.S. and Intel could close $8.5B chip funding by year-end – report

Intel (NASDAQ:INTC) is set to finalize an agreement with the U.S. government for $8.5B in direct funding by the end of this year, the Financial Times reported, citing people familiar with the matter.

This funding is part of the broader initiative under the CHIPS and Science Act, aimed at bolstering domestic semiconductor manufacturing capabilities.

The talks were at an advanced stage, but there is no assurance that they would be concluded before this year-end. Any acquisition of all or a portion of Intel’s (INTC) company might potentially scuttle the talks, the report said.

The funds will support Intel’s (INTC) semiconductor projects across several states, including Arizona, New Mexico, Ohio, and Oregon, where the company plans to expand its capacity.

Earlier this year, President Biden awarded Intel (INTC) nearly $20B in grants and loans to enhance domestic chip production.

The CHIPs Act, signed into law in August 2022 by President Biden, was called “once-in-a-generation” legislation to provide a stronger and more secure economy. Since then, more than $35B of the $52.7B in federal subsidies has been doled out to various companies.

Intel stock traded 0.92% lower on Friday during pre-market hours of trading. The chipmaker gets a quant rating of Hold with the highest factor grades given to profitability.