Dive brief:
- The Biden administration granted Intel a funding award of $8.5 billion Wednesday as part of the CHIPS and Science Act, the largest donation to date under the law.
- The preliminary agreement also includes up to $11 billion in loans granted under the funding act. The money will be used for Intel’s semiconductor projects in Arizona, New Mexico, Ohio and Oregon. the company said in an announcement.
- The chip giant also plans to claim the Treasury Department’s investment tax credit equals 25% in more than $100 billion of Intel’s US investments.
Diving knowledge:
The four semiconductor projects are part of Intel’s plan to invest more than $100 billion to expand capacity and chip production capabilities in the United States over the next five years.
These plans include the delivery of five semiconductor process nodes in four years and a push for the growth of its most advanced process node, Intel 18A. Microsoft plan to use node 18A to produce a chip designed in-house by the software manufacturer.
Intel’s advanced chips will be used in technologies that help develop artificial intelligence and military capabilities. This includes advanced packaging technologies that it will combine with its foundry services to improve serve in the usa-based customers, according to the Commerce Department press release.
“AI is supercharging the digital revolution, and everything digital needs semiconductors,” Intel CEO Pat Gelsinger said in a statement. “Support of the CHIPS Act will help ensure that Intel and the US remain at the forefront of the AI age as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”
Intel’s investment will also create more than 10,000 manufacturing jobs and nearly 20,000 construction jobs., as well as 50,000 indirect jobs created throughout the chipmaker’s supply chain and supporting industries.
The deal also includes approximately $50 million to focus on developing Intel’s manufacturing and semiconductor workforce. The chipmaker has spent $250 million over the past five years on workforce development, building partnerships with local communities, colleges and universities, and apprenticeship programs.
New funding could help from Intel construction schedules as the company has has encountered a recent delay one of its domestic manufacturing projects. Last month, the company pushed back the schedule $20 billion semiconductor project in New Albany, Ohio. The New Albany site, which includes two chip factories, is now expected to be completed by the end of 2026.
“CHIPS Act funds will help support our ongoing work in Ohio, along with our projects in Arizona, New Mexico and Oregon,” an Intel spokesperson said in an email Wednesday. “As far as Ohio is concerned, typical timelines for developing a facility of this scale are 3 to 5 years from innovation, depending on a number of factors.”
