As part of the CHIPS and Science Act, Intel will receive the funds to boost its US operations — a vital cash injection as the company looks to shed $10 billion in savings — though any potential takeover could hinder the deal.
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The FT reports that Intel’s direct funding is being finalised and could be completed by the end of the year.
While discussions over the $8.5 billion funding and a further $11 billion in loans are in an advanced stage, the FT suggests that should Intel or any of its business be taken over, it could impact the process.
Qualcomm is reportedly interested in a potential takeover of Intel, with the beleaguered semiconductor firm desperate to raise cash to improve its position. There have also been suggestions Arm Holdings is circling with interest — the irony given that Intel held 1.18 million shares in the company only to sell them in August to raise funds.
Intel is looking to sell Altera, its programmable logic device manufacturing company, and is also looking to shift its foundry business, which manufactures chips for third parties into a separate unit.
Intel’s deal with the US government, signed in March, provides funds to build manufacturing sites in Arizona, Ohio, New Mexico, and Oregon. According to the FT, any potential sale of its foundry business could have repercussions on the deal.
In addition to the $8.5 billion deal, Intel recently penned a seperate partnership to provide the US Department of Defence with domestically manufactured chips for up to $3 billion in direct funding.
Intel’s commitments to the US come as it looks to shed costs from its European operations.
The company paused expansion plans for factory sites in Germany and Poland and is looking to sell the site of its European headquarters in Swindon, England, according to local media.
Intel is looking to cut costs to shore up its financial position, with CEO Pat Gelsinger telling staff in mid-September that the company should “continue acting with urgency” to create a more competitive cost structure.
The company previously announced job cuts in August, laying off some 15% of its workforce to “resize and refocus.”
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