Race against time: Could Intel get Ohio plant's CHIPS funding and a merger?

NEW ALBANY, Ohio (WCMH) -- Both sides of the political aisle are planning next steps for President-elect Donald Trump's second term in office, and their plans both involve Intel.

As Intel has grappled with layoffs, restructuring and a dropping stock price thanks to back-to-back losses in its last two quarterly earnings reports, CEO Pat Gelsinger has been weighing options that may return the company's good fortune. Just two years prior, his company was the poster child alongside President Joe Biden for a push for domestic semiconductor manufacturing. The initiative saw the CHIPS and Science Act materialize, in hopes of weaning the U.S. off dependence on Taiwan, the international hub for computer chip manufacturing that faces an ever-present threat of Chinese invasion.

As part of the legislation, Intel secured billions in federal funding to construct a new fabrication plant in New Albany and expand its existing computer chip factories in Arizona and Oregon. Fast-forward to 2024, and Intel still has yet to receive the promised $8.5 billion in funds. Gelsinger, speaking with Yahoo! Finance, made it known he was getting impatient.

"It is well over two years since the CHIPS Act passed and over that period I have invested $30 billion in U.S. manufacturing, and we have seen $0 from the CHIPS grants," Gelsinger said. "This is taking too long, we need to get it finished."

Gelsinger's comments preempted the results of the 2024 general election, which hold former President Donald Trump as the projected winner over Kamala Harris. Trump's party also shared intentions to quickly launch his policies once he assumes office. On Nov. 1, Speaker of the House Mike Johnson told a reporter "we probably will" repeal the CHIPS Act, eliminating Intel's massive incentive to build in Ohio after Trump expressed negative opinions of it and a preference for tariffs instead.

Johnson later walked back his comment in part, turning to focus more on stripping back portions of the CHIPS Act compared to getting rid of it entirely.

“To the contrary, there could be legislation to further streamline and improve the primary purpose of the bill—to eliminate its costly regulations and Green New Deal requirements,” Johnson said.

But reassurances of a modified CHIPS Act were not enough for the Biden Administration, who sources told Bloomberg was working Thursday to finalize the legislation's deals before the sitting president vacates the office. Going further, Semafor reported Department of Commerce officials are growing concerned over Intel's current condition as a company, and entered "purely precautionary" talks about assistance beyond CHIPS.

While sources told Semafor there was little interest in a government bailout, a possible option is a government-encouraged merger with another semiconductor company. They could have options for different suitors, as some large firms like Qualcomm have reportedly entered talks to acquire Intel outright. However, Qualcomm in particular decided to hold off on making any offers until the election's results materialized, and hasn't made any further moves as of Wednesday.

Biden's administration is working against the clock; U.S. Congress will certify the results of the election on Jan. 6, 2025, followed by Trump swearing into office on Jan. 20. Intel's next earnings report -- a key measurement of how the company is doing -- will come due shortly after Trump takes office. Wall Street Horizon projected the next report, where Intel will have to include both fourth quarter and total year data, could arrive on Jan. 30.