The United States Commerce Department has finalized a $7.86 billion subsidy for Intel, marking a significant step in efforts to strengthen domestic semiconductor manufacturing.

According to a recent Reuters report, this amount is slightly reduced from the $8.5 billion figure announced in March, a change attributed to Intel’s separate $3 billion Pentagon contract drawn from the same $39 billion semiconductor funding pool.

The 2022 CHIPS Act funding will support approximately $90 billion in manufacturing investments across multiple states, including Arizona, New Mexico, Ohio, and Oregon. These initiatives aim to rejuvenate semiconductor production within the US, reversing years of reliance on foreign-made chips.

US Commerce Secretary Gina Raimondo underscored the importance of the investment, stating it will enable the return of American-designed chips created by American workers to domestic factories.

According to official sources, Intel has already met initial milestones for its projects and is expected to receive at least $1 billion of the approved subsidy by the end of December. The funding represents the largest award under the CHIPS Act, which has allocated $52.7 billion to bolster domestic semiconductor manufacturing and research.

While the subsidy is a major boost for Intel, the grant is not linked to the company’s financial challenges this year, including shrinking margins and workforce reductions. The decision to support Intel aligns with the broader national strategy to reduce dependence on foreign semiconductor suppliers and enhance technological security.

Intel CEO Pat Gelsinger expressed optimism about the subsidy, describing it as critical for America’s economic growth and national security. “This funding positions Intel to expand its leadership in the semiconductor industry, a cornerstone for technological innovation and competitiveness in the global market,” he stated.

The $7.86 billion award reflects the government’s confidence in Intel’s ability to drive domestic semiconductor production. However, Intel declined an $11 billion low-cost government loan earlier this year, citing shareholder concerns over its terms.