Intel gets US$19.5 billion to build and improve semiconductor factories in largest chip investment in US history
- The grant and loans from the US Commerce Department are part of the Chips and Science Act of 2022, meant to bolster the supply chain and counter China
- Intel, which is increasing its manufacturing capacity in Arizona, New Mexico, Ohio and Oregon, aims to deploy its latest chip production technology by 2025
The US Commerce Department said on Wednesday that tech giant Intel would receive US$19.5 billion to construct and modernise its semiconductor factories in four US states, marking the largest investment ever in American chip manufacturing.
The multibillion-dollar deal will provide US$8.5 billion in direct funding and up to US$11 billion in loans to advance the development of cutting-edge logic chips essential to advanced technologies like artificial intelligence and military systems.
Later on Wednesday, US President Joe Biden toured parts of Intel’s facilities in Arizona – a key battleground state in recent US elections – claiming that the “landmark agreement” was “bringing the future back to America.”
“We are building a future with geographically balanced and resilient supply chains right here in America, right here in Arizona”, he said, adding a prediction that the US will produce nearly 20 percent of the world’s leading chips by the end of the decade.
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Biden tours new Taiwanese chip-making plant in Arizona, fans US-China semiconductor rivalry
Claiming the Chips and Science Act was working, a campaign-mode Biden criticised the Republican Party’s nominee in the November 4 presidential election, Donald Trump, and his “allies” for not supporting the legislation.
Trump won Arizona in 2016; Biden won the state in 2020.
“Unlike my predecessor, I am determined to turn things around to invest in America, all American, all Americans”, he said.
In 2022, Biden signed the US$50 billion Chips and Science Act into law with an aim to restore home-grown production of the tiny brains powering modern gadgets. The US produces less than 10 per cent of the world’s chips and none of the most advanced ones.
“My predecessor, his allies in Congress want to go back. In fact, the vast majority of the team on the other side, my Republican friends didn’t vote for the chips and science”, Biden added.
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Intel CEO Pat Gelsinger chimed in on Wednesday with the same narrative.
In Arizona, Intel is building two new chips factories and expanding an existing one. By 2025, the company aims to deploy its latest 2-nanometer and 1.8-nanometer fabrication technologies. The world’s most advanced chip currently in production – made by Taiwan Semiconductor Manufacturing Company (TSMC) spans 3-nanometers.
The company is also expected to invest more than US$100 billion over the next five years to increase production capacity in Arizona, New Mexico, Ohio and Oregon, creating nearly 10,000 manufacturing jobs.
US Commerce Secretary Gina Raimondo described the funding for Intel as a “massive step towards ensuring America’s leadership in manufacturing for the 21st century”.
Intel competitor TSMC is also building two facilities in the US with investments worth US$40 billion. It too hopes to receive funding from Washington.
Gelsinger said that the federal support would ensure that “Intel and the US stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future”.
