The Department of Defense has halted its plan to issue $2.5 billion in CHIPS and Science Act funding to Intel, Bloomberg reported on Tuesday.
Responsibility for these allocations has now been passed to the Department of Commerce, which was originally set to provide $1 billion of the total funding.
Passed in August 2022, the CHIPS and Science Act aims to rejuvenate the domestic microelectronics manufacturing industry, bolster supply chains and create jobs by investing in American semiconductor providers.
The initial deal between the DOD, Commerce Department and Intel included $3.5 billion in total funding and would have solidified Intel as the prime supplier for military and intelligence organizations. Now, it is up to the Commerce Department to evaluate its distribution of CHIPS and Science Act funding and fill in this gap.