Biden to Inject Nearly $20B into Intel’s US Chip Plan

The Biden administration on Wednesday announced it would award chip giant Intel nearly $20 billion in grants and loans to kickstart the company’s ambitious 5-year, $100 billion effort to build and enhance massive US-based chip manufacturing operations.

The administration will agree to inject $8.5 billion in grants along with up to $11 billion in loans for the Intel projects with funds from the 2022 CHIPS and Science Act, which earmarked $52.7 billion to boost domestic semiconductor production.

Intel also plans to use a US Treasury Department Tax Credit (ITC) for up to 25% of its investment. Intel says the new chip manufacturing plants (called “fabs”) will create more than 10,000 company jobs, 20,000 construction jobs, and 50,000 indirect jobs from suppliers and supporting industries.

“Today is a defining moment for the US and Intel as we work to power the next great chapter of American semiconductor innovation,” said Intel CEO Pat Gelsinger in a prepared statement. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the US stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”

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The US investment is part of an effort to re-establish the country’s footing in the chip market, which is now heavily reliant on manufacturing in China and Taiwan. That lopsided dependence was a major factor in supply chain disruptions during the COVID-19 pandemic. According to the Semiconductor Industry Association (SIA), the US global semiconductor manufacturing position fell from 37% in 1990 to just 12% in 2020.

“With this agreement, we are helping to incentivize over $100 billion in investments from Intel -- marking one of the largest investments ever in US semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation,” US Secretary of Commerce Gina Raimondo said in a statement. “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 US.”