Intel Shares Surge as Biden Administration Unveils $20 Billion Initiative
In a significant boost to the U.S. semiconductor industry, Intel Corporation (NASDAQ: INTC) is set to receive nearly $20 billion in grants and loans from the Biden administration to enhance domestic chip production and reduce reliance on foreign manufacturers. After the announcement, Intel’s stock price surged over 4% in premarket trading.
Intel to Receive Nearly $20 Billion in Grants and Loans to Boost US Domestic Chip Production
Intel Corporation is set to receive nearly $20 billion in grants and loans from the Biden administration to boost domestic semiconductor chip production.
The funding, which includes $8.5 billion in grants and up to $11 billion in loans, is part of the larger $52.7 billion allocated by the 2022 CHIPS and Science Act to enhance U.S. semiconductor output. The act includes $39 billion in production subsidies and $11 billion for research and development.
The funding aims to reduce the U.S.’s reliance on China and Taiwan for semiconductor manufacturing, as the U.S.’s global share has dropped from 37% in 1990 to 12% in 2020. Intel plans to use the funds to construct two new factories and modernize an existing one in Arizona.
In addition to the $20 billion, Intel is expected to receive up to $3.5 billion from the Commerce Department to enhance security at its Arizona facilities for producing chips for military use.
Intel Stock Up Nearly 4% in Premarket Trading
Intel Corporation stock closed at $42.05 on Tuesday, a decrease of $0.66 (-1.55%) from the previous close of $42.71. In pre-market trading, the stock price increased by $1.65 (+3.92%) to $43.70 at the time of writing.
Over the past 52 weeks, Intel’s stock has traded between $26.86 and $51.28. The trading volume for the day was 34,477,528 shares, lower than the average volume of 44,156,490 shares.
Do you think Intel will be able to capitalize further on the need for a robust domestic semiconductor industry? Let us know in the comments below.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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