Beleaguered chipmaker Intel Corp (NASDAQ:INTC, ETR:INL) is losing half a billion dollars in government subsidies under US president Joe Biden’s CHIPS and Science Act, according to a New York Times report.
Intel has been the greatest benefactor of Biden’s CHIPS Act, which allocated $39 billion in federal funding to enhance the US’s domestic chipmaking capabilities.
If the NYT’s report is accurate, Intel’s $8.5 billion subsidy package is being reduced to $8 billion.
It would be yet another blow for the legendary Silicon Valley tech firm at a time when it is failing to keep face with global chip manufacturing rivals Taiwan Semiconductor Manufacturing Company and Samsung.
Intel received the government funding to build out costly chip foundries, but the mission has been plagued by a series of management missteps.
Intel chief executive Pat Gelsinger infamously decided not to invest in the cutting-edge extreme ultraviolet (EUV) machinery used to manufacture high-end artificial intelligence chips.
This has put Intel on the backfoot as AI chip designers including Nvidia, Meta and AMD continue to use TSMC for the bulk of their orders.
Commerce secretary Gina Raimondo has attempted to persuade these tech giants to choose local to little avail.
To make matters worse, Intel’s chip design division’s long-running partner Microsoft Corp (NASDAQ:MSFT) has shifted to competitor Qualcomm for certain devices.
Despite the famed ‘Wintel’ partnership that has seen the two companies maintain close ties over the decades, some Windows laptops now come loaded with Qualcomm’s ‘Snapdragon’ processor instead of Intel processors.
Intel has slashed jobs this year, become subject to takeover talks (from none other than Qualcomm) and has been replaced by Nvidia in the Dow Jones Industrial Average.
The series of unfortunate events caused Intel’s share price to plummet to 14-year low in August.
Year to date, the stock is down nearly 50%.