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The Biden administration is considering giving Intel 10 billion

David Boulder
20. 2. 2024
2 min read

The U.S. government is in intense negotiations to provide more than $10 billion in subsidies to Intel Corp. This initiative is part of a broader effort to boost the production of semiconductors that are essential for the development of smartphones, artificial intelligence and military technology.

The prize package for Intel Corp. $INTC consists-2.4% ofboth loans and direct grants. These measures are intended to strengthen the competitiveness of US chipmakers in the global market while boosting the domestic economy.

This initiative by the Commerce Department builds on earlier steps where it has already awarded several smaller grants to support semiconductor manufacturing. Secretary of Commerce Gina Raimondo recently announced plans to award $39 billion in financial support to help boost chipproduction and encourage innovation in the industry.

INTC

Intel

INTC
$34.20 -$0.84 -2.40%
Target Price
40.25 (+17.69% Upside)

Intel plans to spend tens of billions of dollars to fund chip factories at long-standing plants in Arizona and New Mexico, along with a new plant in Ohio that could become theworld's largest chip factory.

However, the Wall Street Journal reported earlier this month that Intel plans to to delay completion of the Ohio plant until 2026 due to a slowing chip market and a slow rollout of subsidies.

It remainsunclear whether this year's wave of subsidies will speed up or slow downIntel's plans, as the company Taiwan Semiconductor Manufacturing $TSM-3.5% has also applied for US funding. In fact, Taiwan Semiconductor is building a new chip manufacturing plant to be located in Arizona. Micron$MU-4.6% and Samsung Electronics $SMSN.L+2.0% are also building new chip factories in the US and have applied for the program.

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Intel

INTC
$34.20 -$0.84 -2.40%
Fair Price: $01.39
Wcpmlo: 27.32%
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It is not yet clear how and to what extent the federal subsidies will will affect the plans of Intel Corp and other chipmakers in the US. However, the move is indicative of a growing government interest to strengthen the domestic semiconductor industry and the government's efforts to to ensure independence in technological innovation.

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