A very rocky road for U.S. chipmaking giant Intel

CGTN Europe

The U.S. government is reportedly cutting chipmaker Intel's federal grant by $0.5 billion having aimed to to boost domestic production of semiconductor chips.  This news comes after Intel axed thousands of jobs amid preparations to sell some of its campuses to cut costs.  Our correspondent John Terrett has the story from New York.  #Intel #Microchips #Economy #Wallstreet

Transcript

00:00So, Intel is one of the major US microchip makers, okay?

00:04And the huge irony of this is that it lives in Santa Clara in California,

00:08which is where NVIDIA set up shop.

00:11Intel's going, what the hell are you doing here?

00:13Anyway, they live rather uneasily side by side now.

00:16And as you know, NVIDIA is the microchip making company of our era

00:20because it's the one making these very advanced, very expensive AI microchips.

00:24But Intel, if you go back 20 years,

00:26I was present when they launched the Centrino mobile chip,

00:29which is very exciting, down on 34th Street there.

00:32And what that did, it allowed laptops to be mobile for the very first time.

00:37Up until that point, laptops had to have a cord into the wall,

00:40but the Centrino changed all that.

00:42So, Intel, very, very important company.

00:44Under the Biden administration in the last four years,

00:46they drummed up something called the Chips Act,

00:48which was to support companies like Intel

00:50and also to prevent no more supply chain issues.

00:53Because if you remember, we had real microchip supply chain issues

00:56in and around the COVID thing that happened.

00:58So yesterday, the New York Times,

01:01which is just even today when it lands on your doorstep,

01:04it's that thick. It's a thick newspaper.

01:06And the New York Times is reporting that the administration in Washington, D.C.,

01:10is about to trim the money it was going to give to Intel by quite a lot.

01:14And the reason is there are woes about Intel.

01:16There are concerns about its competitiveness in the market today

01:20and its failure to build some factories,

01:22which it apparently promised it would do.

01:24So they're presumably going to lose some of the funds and the credits

01:29and the tax breaks associated with the Chips Act, according to the Times.

01:32Now, it's a blow for Intel.

01:34As you said, they're axing 15,000 jobs to cut costs.

01:37They're splitting their design division from their foundry,

01:40which is where they actually make the microchips.

01:42But now this is where it gets complicated,

01:44because late news is reaching me here.

01:46Other people are now reporting that Intel is close to agreeing

01:50an $8 billion deal with the federal government.

01:53So that would seem more than the New York Times was indicating yesterday.

01:57So we'll watch it very closely.

01:58But for that reason, Intel shares are up about 3 percent right now,

02:02whereas you might have expected them to be down.

Category

Transcript

Recommended