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The Biden administration is channeling $20 billion in grants and loans for Intel to expand its semiconductor production facilities in the US - the largest investment through the $52 billion CHIPS and Science Act.
Why it matters: The chips program is a cornerstone of Biden’s economic agenda, and with the elections just around the corner, Biden is expected to release funds faster to catalyze manufacturing growth.
- This is the fourth award through the CHIPS and Science Act to date.
By the numbers: Intel is set to receive $8.5 billion in grants and is eligible for $11 billion in loans from the Commerce Department.
- Intel also plans to leverage a Treasury Department investment tax credit, which could cover as much as 25% of its capital expenses.
- The administration estimates the capital will lead to a $100 billion investment from Intel to build or expand chip facilities in Arizona, Ohio, New Mexico, and Oregon.
Zoom in: President Joe Biden spoke at Intel’s Ocotillo campus in Chandler, Arizona yesterday to announce the award.
- The administration estimates the projects would create 30,000 jobs over time, while Intel says another 50,000 additional jobs would be created indirectly.
- Intel expects to complete construction of the facilities in late 2026.
What they’re saying: "Last month, I set an aggressive goal for the CHIPS program that America would produce roughly 20% of the world's leading-edge chips by the end of the decade," Commerce Secretary Gina Raimondo told reporters.
- "And this announcement is going to put us on track to meet that goal. We have to. Failure is not an option"
Of note: Besides the US, Japan is also spending billions to develop a domestic chip manufacturing supply chain.
