Intel and Biden admin announce up to $8.5 billion in direct funding under the CHIPS Act

NEWS HIGHLIGHTS

The Biden-Harris Administration announced today that Intel and the U.S. Department of Commerce have signed a non-binding preliminary memorandum of terms (PMT) for up to $8.5 billion in direct funding to Intel for commercial semiconductor projects under the CHIPS and Science Act.

CHIPS Act funding aims to increase U.S. semiconductor manufacturing and research and development capabilities, especially in leading-edge semiconductors. Intel is the only American company that both designs and manufactures leading-edge logic chips. The proposed funding would help advance Intel’s critical semiconductor manufacturing and research and development projects at its sites in Arizona, New Mexico, Ohio and Oregon, where the company develops and produces many of the world’s most advanced chips and semiconductor packaging technologies.

“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” said Intel CEO Pat Gelsinger. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”

Together, the CHIPS Act proposed funding and Intel’s previously announced plans to invest more than $100 billion in the U.S. over five years constitute one of the largest public-private investments ever made in the U.S. semiconductor industry. The historic investment will create thousands of new company positions and construction jobs, foster U.S.-based R&D, strengthen U.S. supply chains, and help ensure American leadership in leading-edge semiconductor manufacturing and technology capabilities.

Today’s announcement demonstrates the U.S. government’s confidence in Intel’s leadership and commitment to expanding U.S. chipmaking capacity and capabilities. It is an investment in America’s technology future, bringing innovation, opportunity and jobs to America.

“There is no one who cares more about revitalizing American manufacturing than President Biden, and today’s announcement is a massive step towards ensuring America’s leadership in manufacturing for the 21st century. With this agreement, we are helping to incentivize over $100 billion in investments from Intel – marking one of the largest investments ever in U.S. semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation,” said U.S. Secretary of Commerce Gina Raimondo. “This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the U.S.”

Under the PMT, Intel would also have the option to draw upon federal loans of up to $11 billion. Intel also plans to claim the U.S. Treasury Department’s Investment Tax Credit (ITC), which is expected to be up to 25% of qualified investments of more than $100 billion over five years. The PMT provides that the direct funding award and federal loans are subject to due diligence and negotiation of a long-form term sheet and award documents, and are conditional on the achievement of certain milestones and remain subject to availability of funds.

Technology Leadership

Intel’s strategy is centered on three core elements – establishing process technology leadership, building a more resilient and sustainable global semiconductor supply chain, and creating a world-class foundry business – all of which align with the objectives of the CHIPS Act to promote semiconductor manufacturing and technology leadership in the United States.

In addition to its significant investments to expand U.S. manufacturing capacity, Intel is on track to deliver five semiconductor process nodes in four years and expects to return to process technology leadership by 2025 with Intel 18A. Intel recently announced an extended process technology roadmap that adds the more-advanced Intel 14A to the company’s leading-edge node roadmap, in addition to several specialized node evolutions.

Read more