Intel Corp. and the U.S. government will likely finalize a deal to provide the company with $8.5 billion in CHIPS Act funding by year’s end, the Financial Times reported today.
Plans for the cash infusion were first announced in March as part of a broader financing deal. Alongside the direct funding, the Commerce Department intends to provide Intel with access to up to $11 billion in loans. Moreover, the chipmaker is set to receive a Treasury Department tax credit of up to 25% on investments in its manufacturing infrastructure.
The tentative details of the financing were codified in a preliminary, nonbinding memorandum of terms earlier this year. The Financial Times’ sources said that talks to finalize the agreement are currently in an advanced stage. However, the discussions could reportedly still encounter delays that may prevent Intel from clinching the $8.5 billion federal funding package before 2025.
Most of the funding will reportedly go toward developing the company’s Intel 18A chip production process. The process is powered by RibbonFET, Intel’s newest transistor architecture.
A RibbonFET transistor is a stack of microscopic, semiconducting ribbons suspended above one another inside a rectangular structure. Engineers can adjust the width of those ribbons to trade off speed for better power-efficiency or vice versa. Moreover, it’s possible to mix and match transistors with different ribbon dimensions in the same processor.
Intel will use the Intel 18A node to make a new flagship server processor codenamed Clearwater Forest. The chip, which the company showcased for the first time last week, is expected to feature up to 300 billion transistors. That’s about 50% more than the number of transistors in Nvidia Corp.’s flagship Blackwell B200 graphics card.
In parallel with its efforts to develop better manufacturing technology, Intel is expanding its fab network. The company has announced plans to build new chip plants in Arizona and Ohio. Additionally, Intel reportedly plans to overhaul its existing fab complex in Oregon with new production equipment and other upgrades.
Alongside the CHIPS Act funding agreement that it’s currently finalizing, Intel has secured several other sources of external financing.
Earlier this year, the company sold 49% of its fab in Ireland to Apollo Global Management for $11 billion. Intel earlier inked a deal with another investment firm, Brookfield, to finance the construction of two new chip plants in Arizona. Intel said at the time of the partnership’s announcement that the project was to cost as much as $30 billion.
According to the Financial Times, finalizing the CHIPS Act financing agreement could prove more difficult if Intel agrees to sell parts of its business. This may help explain why sources told Bloomberg today that Intel had rebuffed a partial takeover offer from Arm Holdings plc. The British chip designer had reportedly sought to buy Intel’s product unit, which includes its processor development teams but doesn’t operate the company’s fabs.
Intel’s push for CHIPS Act funding may also complicate Qualcomm Inc.’s reported takeover efforts. Last Friday, The Wall Street Journal reported that the latter company had expressed interest in buying Intel. Earlier, sources told Reuters that Qualcomm is particularly interested in acquiring an Intel unit that designs chips for personal computers.