Intel's Federal Chip Grant Faces Reduction Amid New $3 Billion Contract

The U.S. government is set to reduce Intel Corp's preliminary $8.5 billion federal grant to less than $8 billion. This adjustment accounts for a $3 billion contract Intel secured for producing chips for the Pentagon. The funding is part of the 2022 CHIPS and Science Act which allocates $52.7 billion to boost domestic semiconductor production.

The U.S. government intends to cut Intel Corp's initial $8.5 billion grant, bringing the total to under $8 billion, according to sources from the New York Times.

This decision follows Intel's successful $3 billion contract to manufacture chips for the Pentagon, aligning with efforts to bolster U.S. semiconductor output.

The grants fall under the 2022 CHIPS and Science Act, aiming to enhance domestic semiconductor production with an investment of $52.7 billion, including subsidies and research funding.

(With inputs from agencies.)