Rushing to distribute "red envelopes" before Trump takes office? The Biden administration is reportedly set to finalize an $8 billion funding allocation for the CHIPS Act with Intel

The Biden administration seems to be accelerating its pace, aiming to distribute the significant "bonuses" from important legislation to businesses before Trump, who questions the chip bill, takes office. On Monday, November 25th, Eastern Time, CNBC reported, citing informed sources, that the relevant grant office established to promote the CHIPS and Science Act of 2022 (hereinafter referred to as the "Chip Act") is about to reach an agreement with Intel to allocate approximately $8 billion in subsidies to Intel, which will be used for the construction of Intel's factories. The U.S. Department of Commerce is expected to finalize this grant in the coming weeks. In addition to the $8 billion grant, Intel also received up to $3 billion in funding under the Chip Act in September this year for manufacturing chips for the Department of Defense. Both the U.S. Department of Commerce and Intel subsequently declined to comment on the news of the new grant. Intel's stock price maintained its upward trend on Monday, reaching an intraday high of nearly 4.4% before narrowing the gain to about 2%. If the above report is accurate, the final grant amount determined by the U.S. Department of Commerce for the Chip Act has also "shrunk." Last Sunday, The New York Times reported that informed sources revealed that considering Intel previously received a $3 billion contract for producing chips for the military, the Biden administration plans to reduce the initial grant amount for Intel from the $8.5 billion announced in March this year to $8 billion. According to the report, the decision to reduce the grant is related to Intel's delay in some planned investments for building a chip factory in Ohio. Intel's new $20 billion wafer fabrication facility in Ohio was originally scheduled to begin production in 2025, but the expected production timeline has now been pushed back to 2027-2028. The Biden administration's reduction in grants is reportedly also taking into account Intel's technology roadmap and customer demand. Intel has been striving to enhance its technological capabilities to catch up with competitors like TSMC, but has struggled to convince customers that it can match TSMC's technology. More than a week ago, on November 15th, the U.S. Department of Commerce announced the signing of a final agreement with TSMC, under which TSMC will receive $6.6 billion in government subsidies for chip production at its subsidiary in Arizona, according to the Chip Act. This is a large-scale grant finalized since the Chip Act was introduced in 2022. It led investors to speculate that the Department of Commerce would also formally allocate related subsidies to Intel, while also prompting speculation that the Biden administration would rush to allocate funds before Trump takes office. Just weeks before the agreement between the Department of Commerce and TSMC, Trump questioned the Chip Act during an interview at the end of October, close to the election. He told podcast host Joe Rogan that the government's way of encouraging companies to produce chips in the U.S. should be through tariffs on imported chips, rather than providing grants like the Chip Act. Trump stated at the time: "The chip deal is terrible. I see we are spending a lot of money to get people to manufacture chips (in the U.S.), and that's not the way to do it. You don't necessarily have to pay a monetary price. You can achieve this through a series of tariffs." Last week, The Wall Street Journal reported that U.S. government officials are racing to provide promised billions in subsidies related to the CHIPS Act to companies like Intel. Of the $39 billion in grants provided under the CHIPS Act, the Department of Commerce has preliminarily determined to allocate most of it, but nearly $30 billion of that is tied up in complex government negotiations, leaving the future of these agreements uncertain as Trump is set to take office. The report mentioned that the Department of Commerce's goal is to complete as many of these grants as possible in the next two months before Trump takes office. U.S. government and corporate leaders stated that the completed grants are legally binding and cannot be withdrawn in the future without Congressional approval