Intel, Biden Announce $8.5 Billion in Direct Funding to Advance US Chip Manufacturing

Intel and the U.S. Department of Commerce have unveiled plans to direct up to $8.5 billion to Intel for commercial semiconductor projects under the CHIPS and Science Act.

The initiative aims to bolster U.S. semiconductor manufacturing, research, and development, particularly in cutting-edge semiconductor technologies. Intel, the sole American company engaged in designing and manufacturing leading-edge logic chips, benefits significantly from this proposed funding.

"Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation," Intel CEO Pat Gelsinger said in a press release statement.

"AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation's future."

Intel Looks to Advance US Chip Manufacturing Capacity

The funding will support Intel's semiconductor manufacturing and research projects across its facilities in Arizona, New Mexico, Ohio, and Oregon, where the company spearheads developing and producing advanced chips and semiconductor packaging technologies.

The collaboration between the CHIPS Act funding and Intel's existing plans to invest over $100 billion in the U.S. over five years represents one of the largest public-private investments in the U.S. semiconductor industry.

This Investment is expected to generate thousands of new job opportunities and construction jobs, foster U.S.-based research and development, fortify U.S. supply chains, and reinforce American leadership in leading-edge semiconductor manufacturing and technology.

"This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the U.S.," said Secretary of Commerce Gina Raimondo.

Federal Loans of Up to $11 Billion

Under the preliminary memorandum of terms (PMT), Intel would also have the option to access federal loans of up to $11 billion. Additionally, Intel intends to leverage the U.S. Treasury Department's Investment Tax Credit (ITC), which could potentially cover up to 25% of qualified investments exceeding $100 billion over five years.

Intel's strategy involves three core elements: establishing process technology leadership, building a resilient and sustainable global semiconductor supply chain, and creating a world-class foundry business.

These objectives closely align with the goals of the CHIPS Act, which seeks to promote semiconductor manufacturing and technology leadership in the U.S.

Intel is set to deliver five semiconductor process nodes within four years, alongside significant investments to expand U.S. manufacturing capacity. Anticipating a return to process technology leadership by 2025 with Intel 18A, the company has recently unveiled an extended process technology roadmap.

This roadmap incorporates the more advanced Intel 14A into its leading-edge node roadmap alongside various specialized node advancements.