US Aims to Finalize $11 Billion Semiconductor Subsidy Discussion for Intel Within This Year

US-Intel Aim to Finalize Subsidy Discussions Within the Year
Subsidy Amount 11.2 Trillion Won... Largest Scale

Intel logo. [Photo by Reuters Yonhap News]

The U.S. government and Intel plan to complete discussions on semiconductor subsidies amounting to $8.5 billion (approximately 11.2 trillion KRW) within this year.

On the 27th, major foreign media reported that the U.S. government and Intel will conclude negotiations on semiconductor subsidies by the end of the year. However, there is no guarantee that the negotiations will be finalized within the year, and if Intel’s business unit is sold midway, the discussions could be halted.

In March, under the Chips Act, the U.S. government provisionally agreed to support Intel, a domestic semiconductor manufacturer, with up to $8.5 billion in funds and $11 billion in loans, totaling $19.5 billion. The $8.5 billion is the largest support amount for a single company.

The Chips Act is a law designed to encourage semiconductor companies to invest in facilities within the United States. Companies building factories in the U.S. will receive a total of $52.7 billion in support over five years, including $39 billion in semiconductor production subsidies and $13.2 billion in research and development (R&D) grants.

When announcing the subsidy agreement with Intel, the U.S. government stated that 3,000 manufacturing jobs and 7,000 construction jobs would be created in Arizona. Arizona is a key battleground state in the upcoming November presidential election.

An official close to Intel said, "It would not be surprising if the deal is finalized before the November election."

Meanwhile, Intel is undergoing intensive restructuring due to deteriorating performance. Recently, large-scale new investment plans in Germany and Poland have also been temporarily suspended.

In this situation, various companies and institutions are attempting to acquire Intel. Notably, U.S. semiconductor company Qualcomm has proposed an acquisition of Intel. However, Qualcomm’s acquisition must pass regulatory review by competition authorities. The UK semiconductor design company ARM Holdings also attempted to acquire Intel’s product business unit that sells chips for personal computers, servers, and networking equipment but received a refusal to sell. Additionally, asset management firm Apollo Global Management has expressed an intention to invest up to $5 billion in Intel.