Intel CEO complains 'this is taking too long' after investing $30B but receiving zero CHIPS Act funding

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Which is why it had to kick-off its fab co-investment program.

Intel D1X Mod3 fab expansion in Oregon
(Image credit: Intel)

Pat Gelsinger has expressed frustration with how slow the U.S. CHIPS and Science Act is working. The Intel CEO was speaking in an interview with the executive editor of Yahoo! Finance, Brian Sozzi. Since President Joe Biden enacted the law, Intel has invested over $30 billion in its U.S.-based manufacturing facilities while receiving zero from the American government.

"We see the CHIPS Act as a critical thing that we have invested a lot of energy to," said Gelsinger. "As we said on our [earnings] call, we are disappointed by the time it is taking to get it done: it is well over two years since the CHIPS Act passed and over that period I have invested $30 billion in U.S. manufacturing and we have seen $0 from the CHIPS grants. This is taking too long, we need to get it finished."

Indeed, since the enablement of the CHIPS and Science law, Intel has started to package chips at its advanced packaging facility in New Mexico and began to construct new fabs in Arizona and Ohio. Due to lower-than-expected demand for CPUs and a very slow start of Intel Foundry as a contract chipmaker, Intel had to delay the Ohio campus launch by a couple of years, but the company did invest a lot in its facilities in the U.S. It should of course be mentioned that Intel has already received $3 billion in Secure Enclave funding for military chips.

"That said, we are working closely with the CHIPS Office, and constructively engaging with them to finish what we started," Gelsinger said. "But I also want to point out that [the CHIPS Act contains] the grants and the tax [cuts] pieces - and tax pieces are about three times larger than the grants piece of the CHIPS Act. With that, we do see that that continues [as] part of tax law at this point, so we will still see that benefit."

While Intel has been granted some $8.5 billion in direct investment, up to $11 billion in loans, and a 25% investment tax credit of up to $100 billion, it still has to see that $8.5 billion. As a result, Intel had to ensure that it could build its fabs even without direct funding from the U.S. government. As a result, Intel kicked off its Semiconductor Co-Investment Program (SCIP), which in the case of its Fab 52 and Fab 62 in Arizona means that these production facilities will be operated by Intel, but 49% co-owned by Brookfield Asset Management.

"We have made sure that we have the financial structure that allows us to finish with or without CHIPS Act dollars," said the head of Intel. "We will make sure that we execute on the strategy that we have laid out, but we do look forward to finishing what we started with the CHIPS Act, the most important piece of industrial policy legislation in the U.S. and something we proudly participate in."

Anton Shilov
Anton Shilov
Contributing Writer

Anton Shilov is a contributing writer at Tom’s Hardware. Over the past couple of decades, he has covered everything from CPUs and GPUs to supercomputers and from modern process technologies and latest fab tools to high-tech industry trends.

42 Comments Comment from the forums
  • rluker5
    Going to better nodes costs a lot of money. Investing over 3 billion a quarter on this really hurts their bottom line but will hopefully help in the long run. Pretty tough to keep profitable with that big of a negative and that's probably why they are cutting costs so much.
    Reply
  • dalek1234
    CHIPS Act funding is tied to Intel's performance, and the way Inter is performing currently, I wouldn't be surprised if they don't see any of the cash. Would you want to give billions of taxpayers' money to Intel, only to see Intel burn through it all, without expected results, and then collapse as a company? Intel needs to show that it has a bright future, but with the 13th/14th and now the Arrow Lake fiascos, Intel is showing us just the opposite. Pat is just being whiny.
    Reply
  • hotaru251
    I have invested $30 billion in U.S. manufacturing and we have seen $0 from the CHIPS grants.

    funny how its "i" invested but "we" received.

    Also Intel should know how long stuff takes to go through the needed stuff in gov.
    Just getting permits for something at times can take yrs.
    Reply
  • EzzyB
    dalek1234 said:
    CHIPS Act funding is tied to Intel's performance, and the way Inter is performing currently, I wouldn't be surprised if they don't see any of the cash. Would you want to give billions of taxpayers' money to Intel, only to see Intel burn through it all, without expected results, and then collapse as a company? Intel needs to show that it has a bright future, but with the 13th/14th and now the Arrow Lake fiascos, Intel is showing us just the opposite. Pat is just being a whiny b!7ch
    There's an easy assumption that this is just a handout. But, the US government wants something in return. It wants production of these items it deems critical to the US moved out of an area (Taiwan and South Korea) where a hostile neighbor, China and North Korea, have, as a matter or public policy, hostile intent.

    Let's face it, Russia's assumption that Ukraine is, in fact, part of Russia is simply made up as an excuse to invade. China truly believes Taiwan is part of China and both Koreas are called Korea for a reason.

    The US government is NOT willing to pay for all of the costs associated for that. So, I don't think it's a stretch for Intel to claim that they have held up their end of the bargain.

    At the very least we haven't heard of an actual reason from the government as to why the promised funding hasn't been provided. If there was a shortfall on Intel's part one would think they would at least give a reason.
    Reply
  • vanadiel007
    Always the same story. It's a free market until a large Company fails, and then the "programs" start to give them money to survive.

    Let the free market rule, and if that means they go under they go under.
    Reply
  • rluker5
    vanadiel007 said:
    Always the same story. It's a free market until a large Company fails, and then the "programs" start to give them money to survive.

    Let the free market rule, and if that means they go under they go under.
    Except in the case of TSMC where the Taiwan gov got it started and is still the largest shareholder. Remove the influence of the Taiwan gov and TSMC would not even exist. Maybe it isn't totally a free market with chip fabs. The cost and importance isn't as much as highways, electricity or water, but the costs are higher than most companies can shoulder and the importance is also quite high. Probably higher than Aerospace, for example.
    Reply
  • JRStern
    While Intel has been granted some $8.5 billion in direct investment, up to $11 billion in loans, and a 25% investment tax credit of up to $100 billion,
    Is that investment tax credit counted in the $200b slush fund part of Chips Act?
    Or even the loans - which should at least be counted at the IRR/NPV rates?
    I was actually not aware of either of those element when the Act was being discussed.

    I've been saying the $8.5b is just too small a number, but the combination of all three is significantly greater.
    Reply
  • ezst036
    It turns my stomach seeing these wealthy fat cats with their hands out for our money.

    I know CHIPS is popular with many around here and that's exactly why corporate welfare never dies. Someone is a fan of it somewhere, and you just have to find the special interest crowd supporting it to keep the gravy train running.

    CHOO CHOO! CHOO CHOO!
    Reply
  • _Shatta_AD_
    All these chip companies should’ve stayed out of the US in the first place and invest elsewhere. This fake Gold rush will cause hardship for anyone who believes they’ll get easy money to cover their investment. Imagine $30B from Intel alone out of the initial $50B pie and Intel isn’t done yet. You really think the US gov’t is rich enough to subsidize everyone(Samsung, Intel, TSMC, Apple, Global Foundries, Micron, SK Hynix, Kioxia…) even partially?? Afterwards it’ll just drive up consumer pricing by multiple factors cause fab won’t absorb that cost and no one can afford to buy those products. Simply cannot compete with chips made outside the US even with fab hikes and increased shipping included. Then the US get red eyed and artificially drive up prices with tariffs so they force consumers to buy expensive US products as if everyday living cost aren’t high enough. This is all bound to fail.
    Reply
  • Ferlucio
    Obviously government funding will go to the pockets of government. It just makes sense.
    Reply