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phoenix technology news, september 4, beijing time, according to bloomberg news,the biden-harris administration made a big bet that intel corp. would lead a renaissance in u.s. chipmaking, but that bet is running into trouble as intel faces growing financial troubles.this could deal a major blow to the most ambitious u.s. industrial policy in decades.

subsidy prospects unclear, intel's funding needs difficult to resolve

five months ago, the trump administration traveled to arizona with intel ceo pat gelsinger to announce a potential $20 billion incentive package, but to this day, there is uncertainty about when intel will actually receive the money.intel’s struggles could also affect the achievement of government policy goals, including building a secure supply chain for cutting-edge chips for the pentagon and striving to capture one-fifth of the global advanced processor market by 2030.

according to the latest report from bloomberg, intel's sales decline is more serious than expected. the massive loss of funds has forced the company's board of directors to consider taking more radical measures, including splitting up the manufacturing department or cutting global factory construction plans. this situation has undoubtedly made it more difficult for intel to obtain government funding, and it is currently in urgent need of external support.

under the chips act, intel was supposed to receive $8.5 billion in grants and $11 billion in loans, but the funds were contingent on the company achieving key milestones and passing rigorous due diligence.as of now, intel has not received any funds.during the negotiations, intel expressed dissatisfaction with the government's delays and urged to speed up the process of disbursing funds. however, due to the confidentiality of the negotiation details, neither side was willing to disclose more information.

the u.s. department of commerce, the agency responsible for financing the chips act, declined to comment on the negotiations. intel said it has made significant progress on its projects in arizona, new mexico, ohio and oregon, and looks forward to signing a financing agreement as soon as possible.

u.s. president joe biden and intel ceo pat gelsinger, left, arrive at a groundbreaking ceremony for intel's chip manufacturing plant near new albany, ohio, in september 2022. biden called the site "field of dreams."

dismal financial report and layoffs attract attention

on august 1, intel released a disastrous financial report, causing the worst stock price plunge in decades. at the same time, two major credit rating agencies also downgraded intel's debt rating to just above junk bond levels. in response to the difficulties, intel announced that it would lay off about 15,000 employees. this move has undoubtedly attracted widespread attention and criticism from congress for a company that is supposed to help grow the us semiconductor workforce.

in the face of challenges, kissinger said at an investor conference last week that intel is committed to solving current problems and stressed that the company needs to operate flexibly and efficiently to cope with the pressure brought by industry changes.

global manufacturing plans face reassessment

in the field of global chip manufacturing, all companies involved in the chip act need to adjust their strategies based on market conditions rather than political commitments. mike schmidt, head of the us department of commerce's chip office, pointed out in an interview,the chip industry is one of the most cyclical and competitive sectors in the world, so it is necessary to remain flexible to respond to changes.

in addition, according to people familiar with the matter, u.s. commerce secretary gina raimondo has invited executives from nvidia and advanced micro devices (amd) to consider production at intel's ohio plant. once the plant is put into operation, it is expected to become the world's largest chip manufacturing base. but neither company has expressed a clear intention. nvidia said it is evaluating the feasibility of intel as a potential supplier, while amd ceo lisa su avoided related questions and emphasized that she is satisfied with the existing supplier tsmc.

as of press time, nvidia and amd declined to comment. (author/han tianshu)

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