Pentagon Withdraws $2.5 Billion Chip Grant from Intel, Shifting Funding Responsibility to Commerce Department

The Pentagon's decision to pull a planned $2.5 billion chip grant for Intel has led to a shift in funding responsibilities, with the Commerce Department now expected to cover the shortfall.

• Intel's shares fell 3% following the Pentagon's withdrawal of a planned $2.5 billion chip grant, impacting the company's access to federal funding.
• The withdrawal comes despite Intel's anticipation of receiving $3.5 billion in defense funding for advanced semiconductor production for military and intelligence programs.
• Intel aims to secure over $10 billion in incentives from the CHIPS and Science Act, with the Commerce Department now tasked with covering the funding gap left by the Pentagon.
• The decision may redirect a greater share of CHIPS Act funds towards military uses, potentially affecting the distribution of funds for commercial semiconductor projects.
• Intel continues to pursue significant government funding to support its semiconductor manufacturing expansion, amidst concerns over U.S. dependency on foreign chip production.

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