Intel’s Money Woes Threaten Biden's Chips Act

The Biden-Harris administration’s big bet on Intel Corp. to lead a US chipmaking renaissance is in grave trouble as a result of the company’s mounting financial struggles, creating a potentially damaging setback for the country’s most ambitious industrial policy in decades.

Five months after the president traveled to Arizona to unveil a potential $20 billion package of incentives alongside Chief Executive Officer Pat Gelsinger, there are growing questions around when — or if — Intel will get its hands on that money. Intel’s woes also may jeopardize the government’s ability to reach its policy goals, which include establishing a secure supply of cutting-edge chips for the Pentagon and making a fifth of the world’s advanced processors by 2030.

Intel is mired in a sales slump worse than anticipated and hemorrhaging cash, forcing its board to consider increasingly drastic actions — including possibly splitting off its manufacturing division or paring back global factory plans, Bloomberg reported last week. That threatens to further complicate its quest for government funding, at a time when Intel desperately needs the help.

The Silicon Valley company is supposed to receive $8.5 billion in grants and $11 billion in loans from the 2022 Chips and Science Act, but only if the chipmaker meets key milestones — and after significant due diligence. That process, which applies to all Chips Act winners, has been clear from the outset, and aims to ensure that companies only get taxpayer dollars once they’ve actually delivered on their promises. Intel, like other potential recipients, hasn’t received any money yet.