The Biden-Harris administration has announced that Intel could receive up to $8.5 billion in potential direct funding to boost domestic semiconductor production.
The U.S. Department of Commerce has offered Intel a non-binding preliminary memorandum of terms (PMT) to provide funding under the CHIPS and Science Act.
The CHIPS Act is an incentive introduced by the Biden administration to ensure domestic chip production, rather than relying on Taiwanese manufacturing capabilities that could be sabotaged by China.
Billions of dollars for CHIPS
Semiconductor chips are essential for almost all electronic devices, especially those involved in the latest artificial intelligence technologies and cutting-edge military capabilities. Therefore, having the manufacturing capabilities necessary to produce chips so close to China is not the best idea.
Intel is set to invest more than $100 billion in its U.S. facilities, creating tens of thousands of jobs and helping secure domestic semiconductor manufacturing.
U.S. Secretary of Commerce Gina Raimondo commented on the PMT, stating, “There is no one who cares more about revitalizing American manufacturing than President Biden, and today's announcement is a huge step toward ensuring leadership.” of the United States in the manufacturing industry for the 21st century.
“With this agreement, we are helping to incentivize more than $100 billion in investments from Intel, marking one of the largest investments ever made in U.S. semiconductor manufacturing, which will create more than 30,000 jobs well paid and will drive the next generation of innovation.
“This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the cutting-edge chips we need to ensure our economic and national security are made in the United States.”
The proposed investment would also increase employment opportunities and funding for sites in Arizona, New Mexico, Ohio and Oregon, thanks to increased manufacturing and distribution facilities. There is also an opportunity for Intel to borrow from the $11 billion set aside in the CHIPS Act for this purpose.
While the PMT is still subject to change before being agreed upon by both Intel and the Department of Commerce, this announcement puts the Biden administration within striking distance of completing the goals set out in the CHIPS and Science Act.
