Intel to receive $8.5 billion in funding for chip plants in key states

In a strategic move poised to reshape the American technological landscape, the Biden administration has announced a substantial investment in the semiconductor industry. Intel, the tech giant, is set to receive up to $8.5 billion in direct funding and an additional $11 billion in loans. This investment aims to bolster the construction of computer chip plants across Arizona, Ohio, New Mexico, and Oregon, promising to create a combined 30,000 jobs in manufacturing and construction.

President Joe Biden is set to underscore this investment during his visit to Intel’s campus in Chandler, Arizona, leveraging the initiative as a testament to his administration’s commitment to rejuvenating U.S. manufacturing and job growth. This investment, sourced from the bipartisan CHIPS and Science Act signed in 2022, targets the enhancement of domestic semiconductor production—a sector deemed critical for national security and economic prosperity.

Commerce Secretary Gina Raimondo articulated the transformative potential of this agreement, forecasting an increase in the nation’s capacity to produce 20% of the world’s most advanced chips by 2030. This initiative not only aims to reclaim the U.S. leadership in semiconductor innovation but also addresses the vulnerabilities associated with overseas chip manufacturing.

Intel’s plans to channel more than $100 billion into the U.S. over the next five years, complemented by the Biden administration’s funding, are expected to generate significant employment opportunities. This includes 10,000 positions within Intel and approximately 20,000 construction jobs, alongside over 50,000 indirect jobs through suppliers and related businesses.

The announcement arrives amidst the 2024 presidential campaign, where Biden seeks to contrast his economic vision against that of former President Donald Trump, focusing on the revival of American manufacturing. The strategic location of these investments in key electoral states underscores the political dimensions of this economic policy.

Critically, the investment in chip manufacturing is framed as a national security imperative, driven by concerns over the global semiconductor supply chain’s vulnerabilities. This initiative represents a concerted effort to mitigate the risks posed by geopolitical tensions and to ensure the U.S.’s technological autonomy.

The CHIPS Act, hailed as a cornerstone of industrial policy since World War II, serves as the foundation for this historic investment. Intel CEO Pat Gelsinger lauded the act as pivotal for the industry’s future, expressing hopes for continued government support to sustain and expand America’s semiconductor capabilities.

Under the terms of the agreement with the Commerce Department, Intel commits to workforce training and enhancing child care support for its employees, emphasizing the administration’s broader objectives of workforce development and social welfare.

This investment marks a significant milestone in the Biden administration’s industrial and technological strategy, positioning the U.S. at the forefront of the global semiconductor industry and signalling a new era of American innovation and manufacturing prowess.