The United States’ ambitious chip manufacturing revival led by Intel Corp. is facing significant challenges due to the company’s deteriorating financial health, potentially dealing a blow to one of the most ambitious industrial policies in decades.
英特尔面临财务困境，政府补贴受威胁
Five months ago, President Joe Biden and Intel CEO Pat Gelsinger jointly announced a $2 billion subsidy program in Arizona. However, the viability of this plan is now in question as Intel’s ability to secure this funding becomes increasingly uncertain. This situation poses a critical threat to the US government’s key policy objectives of establishing a secure cutting-edge chip supply chain for the Department of Defense and capturing 20% of the global advanced processor production by 2030.
Intel is grappling with a more severe sales slide and cash flow crisis than anticipated, forcing the company’s leadership to consider more aggressive measures, such as potentially spinning off its manufacturing division or scaling back the construction of global factories. These changes could complicate the process of obtaining government support at a time when Intel desperately needs it.
政府补贴计划的挑战
Under the Chips and Science Act of 2022, Intel was eligible for $8.5 billion in grants and $11 billion in loans, but only if the company met certain key milestones and passed a rigorous due diligence process. This process has been consistent for all applicants from the outset, aimed at ensuring that taxpayers’ money only goes to companies that truly deliver on their promises. However, to date, no funds have been distributed to potential beneficiaries, including Intel.
During ongoing negotiations, Intel has expressed dissatisfaction with the government’s delay in releasing funds and has urged for expedited processing. However, sources close to the matter reveal that Intel has refused to provide some of the information requested by government officials, which is needed to assess the feasibility of its manufacturing plans.
The US Department of Commerce, which oversees the disbursement of funds under the Chips Act, has remained silent on the details of the negotiations. Intel, in a statement, said, We have made significant progress on our projects in Arizona, New Mexico, Ohio, and Oregon, and look forward to finalizing the funding agreement soon.
英特尔财报显示亏损，股价下跌
Intel’s financial report released on August 1 revealed unexpected losses and a dim outlook, putting immense pressure on the company. Following the release of the report, Intel’s stock experienced one of its worst declines in decades, with two major credit rating agencies downgrading its debt rating to near-junk status. Additionally, Intel announced plans to lay off approximately 15,000 employees, a concerning signal for a company that was supposed to help strengthen the US semiconductor workforce, drawing criticism from members of Congress.
We have been working hard to address these issues, Gelsinger said during an investor conference last week. Like all companies in the industry, we recognize that we must operate flexibly and efficiently.
Insiders suggest that Intel will review its next steps at a board meeting in mid-September. If the company decides to reduce the scale of its US projects, the subsidies it receives are almost certain to change.
英特尔内部动荡影响公私合作项目
The internal turmoil at Intel could make this landmark public-private partnership a political burden. In March this year, President Biden announced that Intel would be the largest recipient of funds under the Chips Act during a visit to Chandler, Arizona. The act allocates $39 billion in subsidies for the domestic manufacturing of critical electronic components, along with billions more in loans and tax breaks.
Intel not only received a commitment of one-fourth of the private sector’s funding but was also the exclusive beneficiary of a $3.5 billion project for defense and intelligence chip manufacturing. Intel’s plant plans are crucial for the execution of the entire Chips Act.
However, Intel’s expansion pace will be determined by market demand rather than solely relying on political commitments. Gelsinger has stated that the company’s current strategy is to first expand factory infrastructure and then gradually equip it with more expensive equipment based on clear market demand.
For instance, back in 2012, then-President Barack Obama announced at an Intel plant in Arizona that the facility would start operations the following year. However, Intel postponed the project’s start date until 2020, and in 2021, the company announced further expansion plans for the Arizona factory.
英特尔面临技术挑战
The US Department of Commerce’s Assistant Secretary for Semiconductors, Mike Schmidt, said in an interview at the beginning of August, We know the semiconductor industry is highly cyclical and competitive, and we must be flexible in responding to changes.
Regarding Intel, Schmidt added, We are satisfied with Intel’s expansion plans and the milestones we have set together. These milestones have been clarified in a preliminary agreement and were personally announced by President Biden in March.
Insiders suggest that Intel hopes to complete the transaction and receive the first grant soon. The company has emphasized its significant investments and provided sufficient guarantees for the overall
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