The US government looked set to heap more misery on struggling chip company Intel by slashing the sum the company receives as part of the massive CHIPS and Science Act funding programme, The New York Times (NYT) reported.

In an article published yesterday (24 November), the newspaper stated Intel’s allocation was set to be reduced from $8.5 billion to less than $8 billion.

NYT explained several factors are at play, with the government apparently factoring in $3.5 billion-worth of grants covering chip production for the US Department of Defence.

The newspaper also mentioned a delayed build of a new chip plant in the US state of Ohio and an overall sense of unease about Intel’s competitiveness as factors in the government’s decision.

If the report is accurate, it would be another blow for Intel at a time when its revenue is under pressure and it is shedding up to 15,000 staff as part of efforts to reignite growth.

The company is reportedly considering offloading assets, with investment banks Morgan Stanley and Goldman Sachs tasked with advising bosses.