Key Points:
- Intel secures $8.5 billion in CHIPS Act funding; additional funding of up to $11 billion may be obtained through the CHIPS and Science Act.
- The funding aims to strengthen domestic chip production and reduce reliance. Intel plans to establish fabs and research centers across multiple states.
- Ohio’s fab facility will focus on manufacturing AI chips, and Intel aims to establish it as a premier manufacturing hub.
- Other semiconductor firms have also received CHIPS Act funding, with TSMC expected to receive funds for its Arizona fab.
The Biden administration has allocated up to $8.5 billion in funding to Intel as part of the CHIPS Act, aiming to bolster semiconductor manufacturing within the United States. Additionally, Intel may secure an additional $11 billion in loans from the CHIPS and Science Act, passed in 2022. President Joe Biden is set to announce these awards in Arizona, underscoring the administration’s commitment to enhancing domestic chip production.
U.S. Secretary of Commerce Gina Raimondo emphasized the significance of this funding in maintaining America’s leadership in innovation, particularly in the realm of leading-edge semiconductors. However, both Intel and the White House clarified that the agreement is preliminary and subject to change.
As a longstanding pillar of the U.S. semiconductor industry, Intel is crucial in powering PCs and data center servers worldwide. Despite stiff competition from companies like Nvidia and AMD, Intel’s unique position as a chip designer and manufacturer sets it apart.
While companies like AMD and Nvidia rely on foundries like TSMC for chip production, Intel’s ownership of chip factories gives it a strategic advantage. Intel’s receipt of CHIPS Act funding is crucial for strengthening domestic chip production capabilities and reducing reliance on overseas foundries.
Intel plans to utilize the CHIPS Act funds to establish fabs and research centers in Arizona, Ohio, New Mexico, and Oregon, investing heavily in expanding its U.S. programs and facilities. The company aims to create job opportunities for thousands of individuals in fab construction and chip manufacturing, with significant investments earmarked for leading-edge manufacturing.
In Ohio, Intel’s fab facility, costing over $20 billion, is slated to commence production in 2027 or 2028, focusing on manufacturing AI chips. CEO Pat Gelsinger expressed confidence in Ohio’s potential to become a premier manufacturing hub for AI chips in America, highlighting the ongoing construction efforts and job creation initiatives.
Other semiconductor firms, including GlobalFoundries, Microchip, and BAE Systems, have also received CHIPS Act funding. Furthermore, TSMC is expected to receive funds for its Arizona fab, catering to the production of chips for tech giants like Apple and AMD.
