Intel Secures $8.5 Billion in CHIPS Act Funding for US Chipmaking Fabs
The U.S. Commerce Department has reached a preliminary agreement with Intel to provide 8.5 billion in direct funding for commercial semiconductor manufacturing in the United States.This funding comes as part of the CHIPS Act, aimed at revitalizing domestic chip production. Intel will also receive 11 billion in low-interest loans and a 25% investment tax credit on up to $100 billion of its capital investments. President Biden is set to announce this deal at Intel's Ocotillo campus in Arizona.
Intel plans to use the funding to support its chipmaking facilities in Arizona, New Mexico, Ohio, and Oregon. In addition to the direct funding and loans, Intel can claim an Investment Tax Credit from the Department of the Treasury for up to 25% of $100 billion in capital expenditures over the next five years.
The CHIPS Act funding will go towards building new fabs and advanced packaging facilities in four states. Intel aims to construct two leading-edge fabs in Arizona, convert two fabs into packaging facilities in New Mexico, build two planned leading-edge fabs in Ohio, and expand and modernize its campus in Oregon.
The agreement with Intel is the largest CHIPS funding announcement so far, with the potential to create as many as 30,000 jobs in construction and chip development. The White House and Commerce Department believe that this funding will help the U.S. produce around 20% of the world's leading-edge chips by 2030.
Intel is the only chipmaker with design, R&D, and manufacturing in the U.S., positioning it as a key player in national security matters. The CHIPS Act funding specifically applies to Intel's commercial activities, with additional funding for defense and intelligence initiatives being discussed separately.
The partnership between Intel and the U.S. government under the CHIPS Act represents a significant investment in domestic semiconductor manufacturing, with the potential to boost job creation and strengthen US national security.