The Commerce Department continues to dole out money as part of the Chips Act, and Intel Corp. shares are rising premarket Tuesday as some investors appear hopeful the company will soon rake in serious funds.
Intel
INTC,
could receive upwards of $10 billion in subsidies consisting of both loans and direct grants, Bloomberg News reported late Friday. The report noted that the Biden administration was in talks about the funding, which would be the largest award made with money from the 2022 Chips and Science Act that was meant to bolster the U.S. semiconductor-manufacturing industry.
Intel shares were up 3.5% in premarket trading Tuesday.
Intel and the Commerce Department didn’t immediately respond to a MarketWatch request for comment on their plans.
Meanwhile, the department announced Monday that it had agreed to preliminary terms with GlobalFoundries
GFS,
that would give the company $1.5 billion to expand its capacity and modernize its New York and Vermont manufacturing sites. GlobalFoundries shares were roaring more than 7% higher premarket Tuesday.
While it’s unclear when the Commerce Department would announce an Intel grant if it were to go that route, this week is shaping up to be a big week for Intel’s chip-manufacturing business regardless. The company will host an event dedicated to its foundry business Wednesday, and Melius Research analyst Ben Reitzes is calling it one of Intel’s “most important events in recent memory.”
The company said several years back that it would start making chips for other companies in addition to making them for itself.
“We think domestic supply of semiconductors is as important as the US strategic oil reserves,” he wrote. “The USA needs a stable domestic foundry for AI chips over the long-term since the technology is creeping into everything from missiles to tanks to fighter jets.”
He doesn’t expect to get customer names at Wednesday’s event, though “it may be obvious based on who is in attendance.”
Reitzes highlighted that Commerce Secretary Gina Raimondo would be joining Intel’s event virtually. “The talk with Raimondo could be a prelude to a meaningful grant related to the US Chips Act” in the first half of the year, he said.
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