US to provide around $20B in grants and loans to Intel

The U.S. Department of Commerce announced that it has struck a preliminary deal with Intel to offer up to $8.5 billion in grants and $11 billion in loans under the CHIPS and Science Act. South Korea's Samsung Electronics and Taiwan Semiconductor Manufacturing are also anticipated to secure grants. 

President Joe Biden officially declared the agreement, which aims to support the establishment and growth of Intel facilities in Arizona, Ohio, New Mexico, and Oregon, during a trip to an Intel site in Chandler, Arizona – a critical state in the recent election. 

His stimulus package is part of a prominent campaign to diminish America's dependence on foreign chip manufacturers, reinvigorate domestic manufacturing, and enhance its global technological supremacy, following vulnerabilities in the supply chain during the COVID-19 pandemic. 

Despite the fact that semiconductors originated in the United States, the country only produces less than 10% of the world's chips and none of the most cutting-edge ones, as outlined in a statement by the White House. The Biden administration aims to manufacture 20% of the world's state-of-the-art chips in the U.S. by 2030. 

"Corporations have declared investments exceeding $240 billion to repatriate semiconductor manufacturing to the United States since the President assumed office. Jobs in the semiconductor industry are on the rise," the White House mentioned. 

In a separate announcement, the Commerce Department highlighted that Intel anticipates its U.S. investments to surpass $100 billion over the next five years as it enhances capacity in the four states, potentially generating over 10,000 manufacturing positions and nearly 20,000 construction roles. 

"This declaration is the outcome of years of effort by President Biden and bipartisan collaboration in Congress to ensure that the cutting-edge chips crucial for our economic and national security are produced in the US," stated Commerce Secretary Gina Raimondo. 

The CHIPS Act allocates $39 billion in grants. The Commerce Department intends to channel approximately $28 billion of the total toward incentives for leading-edge chip manufacturers. 

Wednesday's funding announcement represents the fourth allocation of such a grant under the act, following the selection of BAE Systems's American subsidiary, Microchip Technology, and GlobalFoundries as previous beneficiaries. 

Source: Newsroom