Intel is currently facing financial difficulties, leading to cost-cutting measures such as job cuts and project delays. However, there is a glimmer of hope as the company is on the verge of receiving $8.5 billion in direct funding from the US government through the CHIPS Act. This funding is expected to be finalized by the end of the year, providing much-needed support to Intel during this challenging period.
Despite reporting a $1.6 billion loss in the second quarter of 2024, Intel is set to receive the largest share of funding under the CHIPS Act, which will significantly boost semiconductor manufacturing in the US. This financial assistance comes at a critical time for Intel as it navigates through its financial struggles.
The potential funding from the CHIPS Act could be a turning point for Intel, instilling confidence in both investors and customers about the company's future. Intel's recovery strategy includes increasing production for its advanced 18A node, which is expected to drive revenue for its foundry unit. With government support and a focus on domestic manufacturing, Intel aims to compete with industry giants like TSMC and Samsung.
Intel has already secured partnerships with major companies like Amazon and Broadcom, indicating its growing presence in the foundry sector. Additionally, Intel's enhanced manufacturing capabilities align with potential US government requirements for local production of processors, driven by geopolitical tensions.
