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The Biden administration has agreed to give nearly $20 billion in grants and loans to Intel to advance leading-edge semiconductor manufacturing across four states — the largest investment through the 2022 bipartisan CHIPS and Science Act.
Intel will receive up to $8.5 billion in grants and $11 billion in loans to build or improve upon chip facilities in Arizona, Ohio, New Mexico, and Oregon, the Commerce Department announced. The company also said it will take advantage of a Treasury Department investment tax credit, which could cover as much as 25% of its capital expenses for the projects. President Joe Biden will appear at Intel’s Ocotillo campus in Chandler, Ariz. on Wednesday to highlight the announcement through the chips program, which represents a cornerstone of his economic agenda.
Commerce Secretary Gina Raimondo said the agreement will set the U.S. up to meet its target of producing 20% of the globe’s leading-edge chips by the end of the decade.
“This announcement is going to put us on track to meet that goal,” Raimondo told reporters. “We have to. Failure is not an option.”
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Officials predicted the Intel investment would be the largest amount given to a single company under the CHIPS and Science Act, which is intended to shore up domestic semiconductor manufacturing in the name of U.S. national security. Most of the world’s advanced chips are currently made in Asia, and specifically in Taiwan.
The administration announced the first grant through the chips program back in December; the Intel award is the fourth announcement to date. Raimondo said it would power an overall $100 billion investment by the company in semiconductor manufacturing, including new facilities Intel is building in Arizona and Ohio and modernization projects covering facilities in New Mexico and Oregon.
The announcement follows reports that Intel was delaying the construction timeline of its manufacturing project in Ohio in part due to market challenges and the pace of chip grants.
A senior Biden administration official took issue with the characterization that construction had been delayed, saying it is typical for it to take three to five years to build a leading-edge chip manufacturing plant. Intel is expected to complete construction of the facilities in late 2026.
Administration officials estimated the projects would create 30,000 jobs over time, while Intel said the projects would also create 50,000 additional jobs indirectly with suppliers and other industries. The funding going to Intel also includes $50 million for workforce and development.
Notable
- One company that hasn’t yet received funding through the program is Taiwan Semiconductor Manufacturing Co., which has delayed work on its planned Arizona chip plants.
- The U.S. isn’t the only nation investing in its domestic semiconductor industry: Japan is spending billions to produce more legacy chips and develop advanced chips.