(Reuters) – The U.S. government plans to reduce Intel Corp’s initial $8.5 billion chip chip deal to less than $8 billion, the New York Times reported on Sunday citing unnamed sources.
The change reflected a $3 billion contract Intel had been awarded to make chips for the Pentagon, the people told the Times.
This spring, President Joe Biden’s administration said it was giving Intel nearly $20 billion in cash and loans, boosting the domestic semiconductor chip company’s output and marking a major government investment to support leading-edge chip manufacturing.
The US has announced an initial agreement of 8.5 billion dollars and up to 11 billion in loans for Intel in Arizona, with some of the money to be used to build two new factories and improve existing ones.
The release was part of the 2022 CHIPS and Science Act, a bid to boost domestic semiconductor manufacturing with $550 million in funding, including $39 billion in semiconductor manufacturing subsidies and $11 billion in research and development.
(Reporting by Mike Stone and Costas Pitas; Editing by Kim COghill)