American semiconductor pioneer Intel is set to receive up to $8.5 billion in direct government funding from the CHIPS and Science Act, part of an effort to advance U.S. chipmaking amid a booming AI industry and competition with China.
The funding announced Wednesday by the U.S. Department of Commerce will support the chipmaker’s plans to invest more than $100 billion in the U.S. over the next five years. The company plans to expand its U.S. semiconductor industry footprint with chipmaking sites in Arizona, New Mexico, Ohio, and Oregon.
Intel is also eligible for up to $11 billion in federal loans, and said it plans to benefit from an Investment Tax Credit through the U.S. Treasury Department of up to 25% on more than $100 billion in qualified investments.
“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” Intel CEO Pat Gelsinger said in a statement Wednesday. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”
President Joe Biden will visit Intel’s Ocotillo campus in Chandler, Arizona, to announce the preliminary agreement, the White House said. The White House added that while semiconductors were invented in the U.S., the country produces less than 10% of the world’s chips today — and doesn’t have a hand in the most advanced semiconductors that are powering AI breakthroughs. Microsoft announced in February it will work with Intel on its ambitions to make more chips with the company’s 18A manufacturing technology, but didn’t specify what the chips would be used for.
Intel says its investments in U.S. semiconductor facilities are expected to create more than 10,000 company jobs, and about 20,000 construction jobs. It added that the plants will also support more 50,000 indirect jobs for suppliers and adjacent industries.