LOS ANGELES (AP) 鈥� The Biden administration plans on reducing part of Intel's $8.5 billion in federal funding for computer chip plants around the country, according to three people familiar with the grant who spoke on the condition of anonymity to discuss private conversations.
The reduction is largely a byproduct of the $3 billion that Intel is also receiving to provide computer chips to the military. President announced the agreement to provide with up to $8.5 billion in direct funding and $11 billion in loans in March.
The changes to Intel鈥檚 funding are not related to the company鈥檚 financial record or milestones, the people familiar with the grant told The Associated Press. In August, the chipmaker announced that it would cut 15% of its workforce 鈥� about 15,000 jobs 鈥� in an attempt to turn its business around to compete with more successful rivals like Nvidia and AMD.
Unlike some of its rivals, Intel manufactures chips in addition to designing them.
Two years ago, President Biden hailed Intel as a job creator with its plans to open a new plant near Columbus, Ohio. The president praised the company for plans to 鈥渂uild a workforce of the future鈥� for the $20 billion project, which he said would generate 7,000 construction jobs and 3,000 full-time jobs set to pay an average of $135,000 a year.
The California-based tech giant's funding is tied to that President has celebrated and which is designed to revive U.S. semiconductor manufacturing. Known as the , the $280 billion package is aimed at sharpening the U.S. edge in military technology and manufacturing while minimizing the kinds of supply disruptions that occurred in 2021, after the start of the coronavirus pandemic, when stalled factory assembly lines and .
The Biden administration helped shepherd the legislation following pandemic-era concerns that the loss of access to chips made in Asia could plunge the U.S. economy into recession. When pushing for the investment, lawmakers expressed concern about efforts by China to control Taiwan, which accounts for of advanced computer chip production.
In August, the administration pledged to provide up to $6.6 billion so that a Taiwanese semiconductor giant could expand the facilities it is and better ensure that the most advanced microchips are produced domestically for the first time. The Commerce Department said the funding for meant the company could expand on its existing plans for two facilities in Phoenix and add a third, newly announced production hub.
The administration has promised to support foundries and reduce reliance on Asian suppliers, which Washington sees as a security weakness.
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Boak reported from Washington.
Josh Boak And Sarah Parvini, The Associated Press
