TL/DR –
President Biden has awarded Intel $8.5 billion to boost the nation’s semiconductor production, marking the largest award from the CHIPS Act fund. The funds will go toward the construction and expansion of Intel facilities around the US, supporting thousands of new manufacturing jobs. In addition to the grants, Intel is expected to receive up to $11 billion in loans and claim federal tax credits that could cover 25% of its expansion projects, which are expected to cost over $100 billion over five years.
President Biden Awards $8.5B Grant to Intel to Boost Semiconductor Production
On Wednesday, President Biden announced an $8.5 billion grant to Intel, to strengthen US semiconductor production. Speaking from Intel’s campus in Chandler, Ariz., Biden stated that this award would fuel thousands of new manufacturing jobs.
“It’s going to transform the semiconductor industry,” Biden said. The award, aimed at Intel’s construction and expansion across the US, is the largest federal funding from the 202 CHIPS Act.
Biden Administration’s Ambitious Semiconductor Production Expansion
The Biden administration is spearheading an ambitious effort to increase semiconductor production, with $39 billion in subsidies. This drives Biden’s goal to decrease America’s dependence on foreign countries for semiconductors. “Nearly all manufacturing of leading-edge chips across the entire industry moved overseas to Asia years ago,” Biden said. “That’s why this is such a big deal: We will enable advanced semiconductor manufacturing to make a comeback here in America.”
Beyond the grants, the federal government plans to award up to $11 billion in loans to Intel. The company is also expected to claim federal tax credits covering 25% of its US expansion projects’ expenses, projected to exceed $100 billion over five years.
Jobs Creation and Advanced Semiconductors Production
The grants will fund Intel’s construction plans in Arizona, Ohio, New Mexico, and Oregon. These projects are projected to create over 10,000 manufacturing jobs and approximately 20,000 construction jobs. Commerce Secretary Gina Raimondo announced that the award would boost the country’s production of advanced semiconductors, which are crucial for AI, smartphones, supercomputers, and sensitive military hardware.
The federal funds will support Intel’s recent advanced plants construction and existing facilities modernization in Arizona and the establishment of a new site in Ohio. In New Mexico, the funds will transform two plants into advanced packaging facilities, and in Oregon, they will expand and modernize an innovation hub.
Upcoming Semiconductor Investments and Their Impact
The Biden administration officials are expected to announce more awards in the coming months to other major chipmakers, including the Taiwan Semiconductor Manufacturing Company, Samsung, and Micron Technology. These companies have also made significant investments in new or expanded semiconductor manufacturing plants in the US in recent years.
Intel’s development of new manufacturing technology has been crucial to shifting away from Asia’s dependence on chips. The investment in Intel is anticipated to enable US companies to lead in the AI industry by ensuring a domestic supply of advanced chips. About $50 million of federal funding will be set aside for Intel to train and develop a new generation of workers for the semiconductor industry.
Since Mr. Biden took office, private companies have announced over $240 billion in semiconductor and electronic manufacturing investments. However, some chipmakers have experienced obstacles in expanding their domestic manufacturing capacity, resulting in delays.
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