Democrat Pres. Nominee Kamala Harris Blindsided by Intel Scandal
Written by Chriss W. Street
Democrat presidential nominee Kamala Harris’ campaign was just blindsided by Intel Corporation slashing 15,000 jobs, suspending its dividend, and expecting a $10 billion loss. The company’s crisis comes four months after Biden-Harris Administration handed two-thirds of the first $13 billion in CHIPS Act cash subsidies to Intel.
The Biden-Harris Administration passed The CHIPS and Science Act (CHIPS Act) in August 2022 to allocate $52 billion in cash grants and $100 billion in tax abatements to incentivizetech corporations to bring semiconductor supply chains back to the U.S to create American jobs, support American innovation, and protect our national security.
The bill kicked off a gold rush with 32 “Beltway Bandit” lobbing firms scrambling for a piece of the action. The bulk of the money was expected to go to semiconductor chip-makers like Intel and Samsung; but tech giants Meta, Microsoft, Google, Amazon and Apple lobbied for their slurp at the trough. Other camp followers included top defense contractors Northrop Grumman and General Dynamics; HVAC companies Carrierand Trane; and labor unions AFL-CIO and Communications Workers of America.
Commerce Secretary and former Democrat Rhode Island governor Gina Raimondo, described the Biden-Harris Whole of Government effort as America’s biggest foray into industrial policy since World War II. Ms. Raimond promised wide geographical distribution of CHIPS cash to states andcompanies, and research institutions.
Vice President Kamala Harris took full credit for passing the CHIPS legislation she claimed would incentivize building 16new semiconductor manufacturing facilities and create over 115,000 manufacturing and construction jobs across the country.
V.P. Harris announced a 2024 plan to fund 25 and 50 separate projects with total investments of $160–200 billion to create 25,000–45,000 new jobs. Harriss released the first tranche of funding on Feb. 22nd with a White House CHIPS Act Statement:
“Semiconductors are the brain of modern technology. While they are no larger than a fingernail and no thicker than a piece of paper, they are essential to every electronic device that we currently use – from computers and televisions to cars and washing machines. Thanks to our Administration’s CHIPS and Science Act, we are announcing the Department of Commerce’s preliminary agreement with GlobalFoundries, which will award approximately $1.5 billion to expand domestic production of semiconductors, strengthen U.S. supply chains, and create thousands of good paying jobs right here in America.”
Intel Corporation stunned the tech industry when it received $8.5 billion of the first $13 billion in Biden-Harris cash on March 22, 2024. Intel won the bulk of CHIPS Act cash by committing to build new multi-billion semiconductor foundries to create 30,000 jobs in 2024 presidential battleground states of Ohio, Arizona, New Mexico and Oregon.
The Commerce Department by the end of July had made $39 billion in CHIPS Act allocations for 23 projects in 15 states, and stated they were on track to complete allocations of allremaining CHIPS funds in 2024, just in time by Nov. 5thelections.
Intel CEO Pat Gelsinger issued a memo to employees on August 1st announcing ominous second-quarter results: “Our revenues have not grown as expected — and we’ve yet to fully benefit from powerful trends, like Artificial Intelligence.” Gelsinger stated that company revenues have fallen $24 billion between 2020 and 2023. “Our costs are too high; our margins are too low. We need bolder actions to address both.”
Wall Street analyst interpreted Gelsinger’s comments a claxon horn that the company was now in survival mode. Panic selling sent Intel (NASDAQ: INTC) stock plunging down 26 percent on the day.
The company was clobbered again on Friday, August 9th, with a 3.8 percent loss after rumors spread that the company had canceled its Silicon Valley annual Intel Innovation 2024 Event: ‘The Future of Technology is Here’ scheduled for September 24thand 25th.
With Intel share price down 42 percent over the last month, 61 percent over the last year, and at its lowest levels since 2013, the Kamala Harris campaign will be blamed for CHIPS Act crony-squandering of a spectacular amount of the taxpayer money.
At least the cash didn't go to Ukraine. Or did it?