Intel Secures $5.7 Billion CHIPS Act Grant Agreement with President Trump, Investing Heavily in Foundry Division

Recent updates indicate that Intel has successfully secured the remaining CHIPS Act grants, as confirmed by CFO David Zinsner, significantly enhancing the company’s financial position.

Intel’s Financial Outlook Strengthened After CHIPS Act Grants

Intel, widely recognized as Team Blue, recently made headlines due to its agreement with the Trump administration, which now allows the administration to hold a 10% stake in the company. This arrangement has been structured under the CHIPS Act grants to ensure it remains budget-neutral. At the Deutsche Technology Conference, Zinsner reported that Intel has received a substantial $5.7 billion in CHIPS Act funding, positioning the company favorably in terms of its financial conditions.

One, we were already thinking, hey, we likely will need a little bit more cash on the balance sheet, given that’s one of Lip-Bu’s core strategies is to solidify the balance sheet. And so this was a quick way of getting initially $5.7 billion in the door. By the way, we have received it. We got it last night. So that’s on the balance sheet.

This strategic move allowed Intel to avoid tapping into capital markets, simultaneously garnering the support of the Trump administration, a vital endorsement for the company’s future prospects. Zinsner emphasizes that this backing is essential for gaining the confidence of significant customers, particularly crucial for Intel’s Internal Foundry Services (IFS) at this juncture. Furthermore, he reassured stakeholders that the company does not plan to reduce its controlling interest in the foundry segment, effectively ruling out any immediate plans for IFS to operate as a separate entity.

We are structuring things in a way where we’re separating ERP systems and creating a separate management board structure over time for Foundry. But I don’t think there’s a high likelihood that we would take our stake below the 50%.

In addition to outlining financial stability, Zinsner offered insights into the advancements within Intel’s foundry division, noting positive outcomes with the 18A process technology and improving yield rates as the company approaches high-volume manufacturing. He also revealed that the Panther Lake project is on schedule, with its first WeU anticipated by Q4 2025, aligning with predictions of increased production for the following year. Additionally, Zinsner mentioned that while there are financial considerations linked to developing new nodes such as 14A and 18A, Intel’s CEO, Lip-Bu Tan, expresses unprecedented confidence in the 14A technology.

Intel Panther Lake CPU Power Ratings Detailed: 25W H-Series, Performance Mode With Up To 64W at PL2 — Intel Panther Lake chip | Image Credits: Intel

David Zinsner also acknowledged some sluggishness in Intel’s consumer market, particularly in the desktop and server CPU sectors. Nonetheless, he remains hopeful about the upcoming Nova Lake and Coral Rapids lineups, suggesting that these new architectures could revitalize Team Blue’s standing in the competitive landscape. His remarks indicate a renewed commitment at Intel to implement strategies that directly enhance its revenue streams and market performance.

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