The U.S. Department of Defense is reported to have withdrawn a plan to support Intel with semiconductor subsidies of US$2.5 billion.
According to Bloomberg on March 13, the Department of Defense held an informal meeting and decided to cancel the plan to support Intel with US$2.5 billion in subsidies. This comes about a week after President Joe Biden signed a document on March 7, allocating US$3.5 billion in subsidies for the production of semiconductors related to advanced defense and intelligence to Intel. The plan was for the Department of Defense to provide US$2.5 billion and the Department of Commerce to provide US$1 billion in support. While this is only a part of the US$10 billion in semiconductor subsidies Intel applied for, it is still a significant amount compared to other companies.
Since the Semiconductor Act was enacted in 2022, over 600 semiconductor companies have requested funding from the U.S. Department of Commerce. The U.S. government has allocated US$39 billion in semiconductor subsidies, attracting many companies to apply for the funds.
The US$3.5 billion the U.S. government planned to support Intel with accounts for 8.9% of the total semiconductor subsidies (US$39 billion). This has led competitors, such as GlobalFoundries, to complain that too much of the subsidy money was going to Intel alone. In fact, GlobalFoundries had been lobbying last week against the defense provisions for Intel, and Bloomberg reported this news of the withdrawal of Intel’s subsidies, citing sources.
A spokesperson for the Department of Commerce related to this stated, “The decision by the Department of Defense is not yet final,” adding, “We will continue to work with Congress to implement the Semiconductor Act in a way that promotes the U.S. economy and national security.”