The Pentagon abruptly withdrew $2.5 billion it had committed to fund Intel’s semiconductor manufacturing plans under the CHIPS Act, creating a significant shortfall in expected incentives.
This disrupted the distribution of the Act’s $39 billion in grants and forced the Commerce Department to reallocate other funds to make up the gap.
Intel had been counting on over $10 billion from the legislation to support its turnaround efforts, including new chip fabrication plants.
The Pentagon’s initial $2.5 billion was part of a $3.5 billion package for Intel to produce defense and intelligence chips.
However, the withdrawal has raised questions about whether Intel will receive less funding overall or if it will leave other chipmakers with fewer resources from the grants.
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