Intel has announced an amendment to its CHIPS Act funding agreement with the US Department of Commerce, allowing the company to remove earlier project milestones and receive about $5.7 billion in cash sooner than planned.
The company stated that the change will provide Intel with greater flexibility in how it uses the funds.
The amended agreement, which revises a November 2024 funding deal, retains some guardrails that prevent the chipmaker from using the funds for dividends and buybacks, doing certain control-changing deals, and from expanding in certain countries.
As part of the deal, Intel issued the US government 274.6 million shares and promised the government the option to buy up to 240.5 million more shares under certain conditions.
The company said that it has set aside 158.7 million shares in an escrow account to be released after the government makes available more CHIPS funds for the Secure Enclave program, designed to expand advanced chips manufacturing.
The company further noted that it has spent at least $7.87 billion on eligible CHIPS Act-funded projects.
According to the reports, the US government’s move to take a 9.9 percent equity stake in the company sparked questions about the outlook for corporate America after President Donald Trump said he plans to do other similar deals.
“The government’s $8.9 billion investment is in addition to the $2.2 billion in grants Intel has previously received, making for a total investment of $11.1 billion,” the company has said.
Intel’s Chief Financial Officer, David Zinsner, said at an investor conference that the Intel stake, announced by the US government last week, is an incentive for the chipmaker to retain control of its contract manufacturing business, or foundry.
