Hillsboro chip maker scores a win amid layoffs and stalled expansion plans.
After announcing major layoffs earlier this year, Intel notched a win last week as the recipient of $3 billion in contracts from the Department of Defense.
The Hillsboro-based tech giant will use the money to expand semiconductor manufacturing for the U.S. government and “enhance the resilience of U.S. technological systems by advancing secure, cutting-edge solutions,” according to a release from the Department of Defense.
The money comes from the 2022 CHIPS and Science Act, an effort by the administration of President Joe Biden to revitalize the American semiconductor industry.
Most program details are classified, an Intel spokeswoman tells Oregon Business.
“Intel is proud of our ongoing collaboration with the U.S. Department of Defense to help strengthen America’s defense and national security systems,” Chris George, president and general manager of Intel Federal, wrote in a statement. “Today’s announcement highlights our joint commitment with the U.S. government to fortify the domestic semiconductor supply chain and to ensure the United States maintains its leadership in advanced manufacturing, microelectronics systems, and process technology.”
Intel, the state’s largest private employer, has worked extensively with the DoD. Past projects include Rapid Assured Microelectronics Prototypes–Commercial (RAMP-C) and State-of-the-Art Heterogenous Integration Prototype (SHIP).
Intel has already been awarded $8.5 billion from the CHIPS Act as well as $11 billion in loans. Those funds are intended to add 10,000 U.S. manufacturing jobs and 20,000 construction jobs in Oregon, Arizona, New Mexico and Ohio. Intel received an additional $115 million from the state government to subsidize factory construction in Hillsboro, including upgrades to its D1X research facility.
In total CHIPS has allotted $52 billion in grants and $11 billion in loans.
Intel has struggled on several fronts in recent years. Revenue from PC and data markets has declined as rival firms continue to take advantage of cheaper labor in China, Taiwan and South Korea. It sought investor help to finance planned manufacturing facilities in Ireland and Arizona and halted plans for a $25 billion factory in Israel.
In August the company announced it would lay off 15,000 employees, including 3,000 in Oregon, layoffs that represent about 15% of the company’s global workforce. Targeted layoffs are ongoing and will conclude by the end of the year. It intends to trim $10 billion by the end of 2025 through cost-cutting measures like making fewer products and suspending the corporate dividend.
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