The US Commerce Department has finalised a $7.86 billion government subsidy for Intel, down from an earlier $8.5 billion figure announced in March, as per a recent report by Reuters. 

The reduction comes after Intel secured a separate $3 billion contract from the Pentagon, with the funding for that contract drawn from the same $39 billion pool intended for semiconductor manufacturing, adds the report.

The subsidy will support nearly $90 billion in manufacturing investments across several US states, including Arizona, New Mexico, Ohio, and Oregon, according to official sources. US Commerce Secretary Gina Raimondo emphasised that this investment will help bring American-designed chips back to US factories, created by American workers for the first time in years.

As per the report, Intel has already met some initial project milestones and is expected to receive at least $1 billion of the award by the end of December. Despite recent challenges, including narrowed margins and job cuts, the grant is not linked to Intel's broader financial struggles this year.

This $7.86 billion award is the largest of any so far under the 2022 CHIPS Act, which allocates $52.7 billion in funding to boost domestic semiconductor production and research, adds the report. Intel also opted against finalising an $11 billion low-cost loan offered by the government in March, citing unfavourable terms for shareholders.

Intel CEO Pat Gelsinger expressed optimism about the subsidy, calling it a crucial investment for America's economic growth and national security. With this subsidy, the company is set to expand its role in the US semiconductor industry, which is key to maintaining technological leadership in the global market.