Intel, Biden-Harris Administration Reach Preliminary $8.5 Billion CHIPS Act Funding Deal

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The proposed funding, along with an investment tax credit and eligibility for CHIPS Act loans, would aid Intel in enhancing American semiconductor manufacturing and technology leadership in the era of artificial intelligence.

In a significant move to bolster the U.S. semiconductor industry, the Biden-Harris Administration, in collaboration with Intel and the U.S. Department of Commerce, has announced a preliminary memorandum of terms (PMT) for up to $8.5 billion in direct funding under the CHIPS and Science Act. This landmark funding aims to enhance semiconductor manufacturing and research in the United States, with Intel, a leading American company in both design and manufacturing of advanced logic chips, poised to benefit substantially.

The proposed funding is set to accelerate Intel’s semiconductor projects in Arizona, New Mexico, Ohio, and Oregon, reinforcing the company’s position at the forefront of cutting-edge chip technology and production. Intel CEO Pat Gelsinger hailed this as a pivotal moment for both the U.S. and Intel, emphasizing the critical role of semiconductors in the AI-driven digital revolution and the importance of a resilient semiconductor supply chain for the nation’s future. The company is also poised to capitalize on an Investment Tax Credit (ITC) offered by the U.S. Treasury Department, potentially receiving up to 25% on over $100 billion in qualified investments. Additionally, the company is eligible for federal loans amounting to up to $11 billion.

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The CHIPS Act funding, combined with Intel’s planned investment of over $100 billion in the U.S. over five years, represents one of the largest public-private investments in the American semiconductor sector. This historic investment is expected to create thousands of jobs, strengthen U.S. supply chains, and ensure American leadership in semiconductor manufacturing and technology. U.S. Secretary of Commerce Gina Raimondo lauded the agreement as a significant step towards revitalizing American manufacturing and securing the country’s leadership in 21st-century manufacturing. The funding is anticipated to spur over $100 billion in investments from Intel, generating over 30,000 well-paying jobs and igniting a new wave of innovation.

The strategy aligns with the CHIPS Act’s objectives, focusing on establishing process technology leadership, building a resilient global semiconductor supply chain, and creating a world-class foundry business. The company is on track to deliver five semiconductor process nodes in four years and aims to regain process technology leadership by 2025. The company’s investments in U.S. manufacturing and R&D are set to bolster chipmaking capabilities in key states, contributing to the nation’s efforts to regain its leadership in the semiconductor industry. It is committed to advancing semiconductor talent through partnerships with government and academia and aims to be the industry’s most sustainable semiconductor foundry, with ambitious environmental goals.

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