Intel Awarded CHIPS Act Funding to Boost Production in U.S.

Campaigning through the swing state of Arizona on Wednesday, President Biden announced Intel is lined up for a $19.5 billion package under the CHIPS and Science Act. The Department of Commerce has reached a preliminary agreement to provide up to $8.5 billion in grants and $11 billion in loans under the 2022 tech stimulus plan. Intel has committed $100 billion of its own. The CHIPS Act “will enable advanced semiconductor manufacturing to make a comeback here in America after 40 years,” Biden said, addressing a crowd at Intel’s Chandler, Arizona plant, which will be modernized using the funds.

The New York Times says the Intel award “is the biggest the federal government has made with funding from the CHIPS Act.”

Passed with bipartisan support, CHIPS authorizes the Commerce Department to spend $50 billion on domestic semiconductor production, with another $26 billion allocated through other agencies, for a total of $76 billion aimed at seeding private investment and helping to establish the U.S. as a global leader advanced chipmaking under the CHIPS for America portion of the $280 billion CHIPS and Science Act.

“Today, the United States produces less than 10 percent of the world’s chips and none of the most advanced ones,” the White House said in an announcement, forecasting that “thanks to CHIPS investments like the one today, America will produce roughly 20 percent of the world’s leading-edge chips by the end of the decade.”

Reuters says the CHIPS funds are “supercharging” Intel’s domestic semiconductor chip output, and quotes Biden saying “if we invented it in America, it should be made in America.”

In addition to upgrading its existing Chandler plant, Intel plans to add two high-end fabs at the campus “to produce Intel’s most advanced semiconductors in the United States,” according to the White House. Intel also intends to build two new fabs in Albany, Ohio; refurbish plants in Rio Rancho, New Mexico, to manufacture AI chips; and expand and modernize facilities in Hillsboro, Oregon, using the CHIPS cash.

Intel is planning to spent $30 billion in each state of Arizona and Ohio, “making it among the largest private-sector investments in the history of those states,” Biden said during the Chandler visit.

While there is concern about Arizona’s dwindling water supply supporting business expansion, CNN reports that both Intel and Taiwan’s TSMC, which is also building a fab in Arizona, “are looking at ways to recycle their water and reduce overall use.”

Intel is one of four companies that have already received preliminary approval from Commerce for CHIPS funds. The other three are GlobalFoundries (building in New York and Vermont); Microchip Technology (Colorado and Oregon); and BAE Systems (New Hampshire). CNN says “the chips made at these plants are critical for use in cars, medical devices, and defense systems.”

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