Shares of Intel Corp . (NASDAQ:INTC) rose more than 2.7% ahead of Tuesday’s market open, driven by reports that the Biden administration is in talks to provide INTC with subsidies of more than $10 billion.
According to Bloomberg News, the proposed financial support for the chipmaker is expected to consist of both loans and direct grants.
This funding initiative is part of the 2022 Chips and Science Act, which allocated $39 billion for direct grants and an additional $75 billion for loans and loan guarantees.
This move aims to attract leading semiconductor companies to shift their manufacturing bases to the U.S., reversing the trend of overseas production that has been prevalent for decades.
Since President Joe Biden's inauguration, semiconductor companies have committed over $230 billion to U.S. investments. The government's objective is to create at least two advanced manufacturing hubs in the country by 2030.
The Commerce Department has already announced two smaller grants under the Chips Act.
Commerce Secretary Gina Raimondo said last week that a “drumbeat of even bigger announcements” is expected within the next six to twelve weeks.