In a move to bolster domestic semiconductor production, the Biden administration announced that Intel has been awarded up to $8.5 billion in funding under the CHIPS Act. This funding aims to support Intel’s efforts to advance semiconductor manufacturing in the United States.
Additionally, Intel could receive an additional $11 billion in loans from the CHIPS and Science Act, passed in 2022. President Joe Biden is set to announce the awards in Arizona, highlighting the importance of keeping America at the forefront of innovation in semiconductor technology.
The funding will enable Intel to maintain its position as a key player in the semiconductor industry, known for developing chips that power PCs and data center servers globally. Despite facing stiff competition from companies like Nvidia, AMD, and Qualcomm, Intel’s unique advantage lies in its ability to design and manufacture chips in-house.
Unlike its fabless competitors, Intel operates chip factories, or fabs, which gives it more control over its manufacturing processes. This is crucial, as semiconductor manufacturing has become increasingly centralized in Taiwan, particularly with TSMC dominating the industry.
The CHIPS Act, aimed at incentivizing domestic chip production, is a strategic move to reduce dependence on foreign manufacturing, particularly in Taiwan. By encouraging companies like Intel to build fabs in the U.S., the Act aims to mitigate supply chain disruptions that could arise from geopolitical tensions.
Intel has already announced plans to invest $100 billion in U.S. programs and facilities, with a focus on catching up in leading-edge manufacturing by 2026. The company plans to use the CHIPS Act funds to build fabs and research centers in Arizona, Ohio, New Mexico, and Oregon, creating thousands of jobs in the process.
One of the notable projects is the construction of a new fab in Ohio, expected to cost over $20 billion and commence production in 2027 or 2028. This fab will produce AI chips for Intel and potentially other semiconductor companies, further solidifying the U.S.’s position in advanced chip manufacturing.
Intel’s CEO, Pat Gelsinger, expressed confidence in the Ohio site’s potential, emphasizing the significant investment and job creation it will bring to the region. Other companies, such as GlobalFoundries, Microchip, and BAE Systems, have also received funding under the CHIPS Act, signaling a broader push to strengthen America’s semiconductor industry.
(Source: New York Times | CNBC)
