Intel's stock rises as a big week for its manufacturing business kicks off

By Emily Bary

Intel will host a key event for its foundry business Wednesday, and Wall Street appears upbeat about the potential for significant Chips Act funding down the line

The Commerce Department continues to dole out money as part of the Chips Act, and Intel Corp. shares were rising Tuesday as some investors appeared hopeful the company would soon rake in serious funds.

Intel (INTC) could receive upwards of $10 billion in subsidies consisting of loans and direct grants, Bloomberg News reported late Friday. The report noted that the Biden administration was in talks about the funding, which would be the largest award made with money from the 2022 Chips and Science Act, which was meant to bolster the U.S. semiconductor-manufacturing industry.

Intel shares were up 2% in afternoon trading Tuesday.

Intel declined to comment. A Commerce Department spokesperson said the agency can't comment on potential subsidy applicants.

Meanwhile, the department announced Monday that it had agreed to preliminary terms with GlobalFoundries Inc. (GFS) that would give the company $1.5 billion to expand its capacity and modernize its New York and Vermont manufacturing sites. GlobalFoundries shares were up 2% Tuesday.

Regardless of whether the Commerce Department might announce an Intel grant, this week is shaping up to be big for Intel's chip-manufacturing business. The company will host an event dedicated to its foundry business Wednesday, and Melius Research analyst Ben Reitzes is calling it one of Intel's "most important events in recent memory."

The company said several years ago that it would start making chips for other companies in addition to making them for itself.

"We think domestic supply of semiconductors is as important as the U.S. strategic oil reserves," Reitzes wrote. "The USA needs a stable domestic foundry for [artificial-intelligence] chips over the long term since the technology is creeping into everything from missiles to tanks to fighter jets."

He said he doesn't expect to get customer names at Wednesday's event, although he noted that "it may be obvious based on who is in attendance."

Reitzes highlighted that Commerce Secretary Gina Raimondo would be joining Intel's event virtually. "The talk with Raimondo could be a prelude to a meaningful grant related to the U.S. Chips Act" in the first half of the year, he said.

-Emily Bary

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02-20-24 1552ET

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