President Biden is planning to announce on Wednesday that his administration will provide up to $8.5 billion in grants to Intel, a significant investment to strengthen the nation’s semiconductor production. This announcement will be made during a visit to the Intel campus in Chandler, Ariz., as part of a tour of battleground states to promote his economic agenda.
The funding, the largest from the federal government under the CHIPS Act, will support the construction and expansion of Intel facilities across the United States. The Biden administration aims to bolster domestic semiconductor production to reduce the country’s reliance on foreign manufacturers.
In addition to the grants, Intel is eligible for up to $11 billion in loans with favorable terms and federal tax credits covering 25% of the cost of its U.S. expansion projects, anticipated to exceed $100 billion over five years.
The grants will support Intel’s construction projects in Arizona, Ohio, New Mexico, and Oregon, creating over 10,000 manufacturing jobs and approximately 20,000 construction jobs. The funds will facilitate the development of advanced semiconductor manufacturing facilities across these states.
The author of the CHIPS Act, lawmakers passed in 2022 to revive U.S. semiconductor manufacturing, has allocated $39 billion in subsidies to the Biden administration for distribution. This effort is aimed at enhancing chip production for various applications, from smartphones to military hardware.
Furthermore, the focus is on transitioning the U.S. to produce cutting-edge semiconductors in-house and reduce the current reliance on Asian manufacturers. This strategic move aligns with national security and economic interests, addressing both economic and security concerns.
Intel will utilize the federal funds to enhance its operations in various states, leading to technological advancements and innovation. The grants are part of a larger effort to establish the U.S. as a key player in semiconductor manufacturing and ensure a stable domestic supply chain.
With Intel set to receive the largest grant under the program, it signifies a major milestone in the country’s semiconductor industry. The investments aim to position the U.S. to produce a significant share of the world’s advanced chips by the end of the decade.
Intel’s CEO, Patrick Gelsinger, views this as a positive step but foresees the need for further investments to reverse the trend of shifting semiconductor investments away from the U.S. To sustain progress, there may be a need for future initiatives, such as a potential “CHIPS 2” program.
The semiconductor investments are crucial for the economic recovery and job creation in key states like Arizona. By promoting such initiatives, the Biden administration aims to emphasize its commitment to addressing critical issues and advancing the national economy.
More grants to major chipmakers are expected in the upcoming months, further solidifying the U.S.’s position in semiconductor manufacturing. These investments are essential for reducing dependence on foreign manufacturers and securing the country’s technological superiority.
