Intel's Financial Struggles and the Chips Act Dilemma

Intel faces significant challenges in securing funding and proving its manufacturing viability, jeopardizing its chip-making ambitions.

### Intel's Struggles: The Biden Administration's Chip-Making Ambitions in Jeopardy
* 💔  Intel is facing **significant financial difficulties** that threaten the Biden-Harris administration's plans for a **U.S. chip-making revolution**.
* 📉  The company has secured **$8.5 billion in grants** and **$11 billion in loans** through the CHIPS Act, but frustrations are mounting as these funds are **not being released quickly enough**.
* 🔍  According to Bloomberg, Intel's CEO, Pat Gelsinger, is reportedly "**running out of time**" to secure the necessary funding while also demonstrating progress on their manufacturing expansion.
* ⚠️  A recent setback involved Broadcom's failed test of Intel's manufacturing process, leading to concerns that **Intel's technology may not be viable for volume production**.
* 🤝  Despite these challenges, Intel claims they are engaged with numerous customers interested in their foundry services, which are **crucial for generating revenue**.
* 📊  However, the company is being forced to make tough strategic decisions, including potentially **scaling back existing projects** and **separating its foundry business**.
* 🤔  This situation creates a dilemma for Intel as they seek **urgent access to government funds** while simultaneously needing to **cut back on their expansion plans**.
* 🕰️  The timing of these developments poses a significant challenge for the Biden administration, as they navigate the complexities of **supporting Intel amid its operational struggles**.

TAKE A LOOK AT THE LOONY HERE, AND YOU CAN SEE, WELL, NOT MUCH MOVEMENT AT ALL. LET'S MOVE ON FROM CANADA. THE BIDEN-HARRIS ADMINISTRATION'S BIG BET ON INTEL TO LEAD A U.S. CHIP-MAKING REVOLUTION IS IN TROUBLE AS A RESULT OF THE COMPANY'S MOUNTING FINANCIAL STRUGGLES. WE DISCUSS WITH BLOOMBERG TECHNOLOGY CO-HOST ED LUDLOW, ALSO I WOULD SAY AN EXPERT ON INTEL. YOU'VE INTERVIEWED PAT ON A NUMBER OF OCCASIONS. THE C.E.O. IS HE IN TROUBLE? ARE THEY GOING TO BE ABLE TO CARRY OUT THE PLANS AND GET THEIR HANDS ON THIS MONEY FROM THE GOVERNMENT? THERE'S A LINE IN THE BLOOMBERG REPORT FROM LAST WEEK ABOUT INTEL'S DIRECTION TO BANKERS LOOKING AT STRATEGIC

OPTIONS THAT PAT IS RUNNING OUT OF TIME. BUT THIS FRUSTRATION -- THERE'S FRUSTRATIONS ON BOTH SIDES. THERE'S FRUSTRATIONS FROM INTEL ACCORDING TO OUR SOURCES THAT THE CHIPS ACT MONEY THEY SECURED, 8.5 BILLION DOLLARS IN GRANTS AND ABOUT 11 BILLION DOLLARS IN LOANS IS NOT FORTHCOMING. INTEL WANTS IT SOONER. THEY WANT ACCESS TO IT. BUT IT COMES WITH STRINGS ATTACHED. WHICH BASICALLY IS PROOF OF WORK ON THEIR MANUFACTURING FOOTPRINT EXPANSION AND VETTING AND THAT'S THE FRUSTRATION ON THE ADMINISTRATION ECONOMIST DEPARTMENT SIDE. THEY MADE RULES ABOUT THE ACCESS TO CAPITAL. INTEL REALLY NEEDS IT BUT IT'S ALSO PER OUR REPORTING PULLING BACK ON ITS AMBITIONS BECAUSE FINANCIALLY IT'S UNDER DURESS. AND WE SEEM TO BE AT A PRETTY

TRICKY SPOT RIGHT NOW. KATIE: OF COURSE, LIBBY FROM PIMCO WAS TELLING US EARLIER ABOUT HOW UNFORTUNATE THIS IS FOR THE BIDEN ADMINISTRATION. JUST WHEN IT COMES TO TIMING HERE. BUT THERE'S BEEN A BEVY OF BAD NEWS WHEN IT COMES TO INTEL. THIS IS FROM REUTERS REPORTING THAT BROADCOM'S TEST INVOLVING SENDING SILICON WAFERS THROUGH INTEL'S MOST MANUFACTURING PROCESSES FAILED. HOW BIG OF A SETBACK IS THAT? WHAT INTEL WOULD TELL IS YOU THAT THEY ARE ACTIVELY ENGAGED WITH, SAY, A DOZEN CUSTOMERS WHO WOULD ON PAPER TAKE ADVANTAGE OF THEIR MANUFACTURING OR FOUNDRY BUSINESS. THE CUTTING EDGE PROCESS THEY HAVE CURRENTLY IS CALLED 18-A. THE REUTERS REPORT SAYS THAT BROADCOM RAN A TEST, THEY RAN SILICON WAFER THROUGH THE

PROCESS AND IT FAILED, AND THE CONCLUSION PER THE REUTERS REPORT THAT BROKE UNREACHED IS THAT THAT INTEL PROCESS IS NOT VIABLE FOR VOLUME PRODUCTION. THE RESPONSE FROM AN INTEL SPOKESPERSON IN THAT REPORT WAS THEY'RE STILL ON TRACK FOR THEIR ORIGINAL TIMELINE. BUT TO JOIN ALL THE STORIES TOGETHER, INTEL NEEDS THE CHIPS ACT MONEY TO RAMP UP ITS FOUNDRY OPERATIONS. IT ALSO NEEDS THIRD-PARTY CUSTOMERS WHO ARE GENUINELY AND TANGIBLY REVENUE-GENERATING FOR THEM TO USE THAT TO STEM ITS FINANCIAL LOSSES. AT THE SAME TIME, THEY'RE HAVING TROUBLE PROVING THAT THAT PROCESS IS GOING WELL, AND PER THE REPORTING AT BLOOMBERG LAST WEEK, THEY'RE HAVING TO MAKE TOUGH DECISIONS TO SCALE BACK. BE THAT STRATEGIC DECISIONS LIKE SEPARATING OUT THE FOUNDRY.

BUSINESS OR MORE LIKELY CUTTING BACK ON EXISTING PROJECTS. SO HOW CAN YOU GO IN GOOD FAITH TO THE U.S. GOVERNMENT AND SAY, WE WANT THE CHIPS ACT MONEY SOONER BUT ALSO BE SORT OF LOOKING AT YOUR OWN BALANCE SHEET AND PLANNING AND SAYING, WE'RE GOING TO HAVE TO PULL BACK ON OUR MANUFACTURING EXPANSION.

Biden's Bet on Intel to Lead US Chipmakers Is in Trouble

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Intel's Struggles and the Chip-Making Revolution

Intel's financial difficulties are jeopardizing the Biden-Harris administration's plan for a U.

The company is frustrated with the delayed disbursement of $8.

5 billion in grants and $11 billion in loans from the Chips Act, which come with strict conditions.

As a result, Intel is pulling back on its expansion plans and is running out of time to secure the necessary funding.

Broadcom's test of sending silicon wafers through Intel's manufacturing processes has failed, causing a significant setback for the company.

Intel is actively engaging with a dozen customers to utilize their manufacturing or foundry business.

The company's cutting-edge process, 18-A, is currently in use, but the failed test raises concerns about their manufacturing capabilities.

Intel's new chip production process has failed to prove viable for volume production, raising concerns about its effectiveness.

The company is still aiming to meet its original timeline, but needs funding from the Chips Act and third-party customers to stabilize its financial losses.

Intel is facing challenges in demonstrating the success of its operations and is making strategic decisions to scale back, including separating its foundry operations.

Balancing Act: Seeking Chips Act Money While Cutting Back on Expansion

Businesses are requesting the Chips Act money from the U.

government sooner, while also planning to cut back on their manufacturing expansion.

This creates a conflict between seeking financial support and managing their own balance sheets.

The situation highlights the challenge of balancing growth plans with the need for immediate funding.