US to cut Intel's $11.5 billion grant under Chips Act

The Biden administration plans to reduce Intel's preliminary US$8.5 billion (S$11.5 billion) federal Chips grant, a move that follows the US tech giant's investment delays and broader business struggles.

Intel, the biggest recipient of money under the Chips Act, will see its funding drop to less than US$8 billion from the US$8.5 billion that was announced earlier in 2024, four people familiar with the grant said.

They all spoke on condition of anonymity because the final contract had not yet been signed. The change in terms takes into account a US$3 billion contract Intel has been offered to produce chips for the US military, these people said.

The government's decision to reduce the size of the grant follows Intel's move to delay some of its planned investments in chip facilities in Ohio.

The company now plans to finish that project by the end of the decade instead of 2025.

The chipmaker has been under pressure to reduce costs after posting its biggest quarterly loss in the company's 56-year history. Intel's sales declined 6 per cent in its most recent quarter, and it is in the process of cutting 15,000 jobs.