Intel Secures $7.86B CHIPS Act Grant to Boost U.S. Semiconductor Manufacturing
In a landmark move to strengthen domestic semiconductor production, the U.S. Department of Commerce has finalized a $7.865 billion grant for Intel under the CHIPS and Science Act. Signed into law in 2022, this federal initiative aims to reduce reliance on foreign chip manufacturing and revitalize America’s tech infrastructure.
Key Details of the Funding
- Purpose: Support advanced semiconductor manufacturing and packaging projects
- Locations: Intel facilities in Arizona, New Mexico, Ohio, and Oregon
- Funding Structure: Milestone-based disbursements
- Additional Benefit: 25% investment tax credit from the U.S. Treasury Department
Intel’s Commitment to U.S. Leadership
Intel CEO Pat Gelsinger emphasized the strategic importance of this investment:
“Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments critical to long-term economic growth and national security.”
The Bigger Picture: Intel’s Foundry Transition
This funding arrives as Intel pivots to a foundry model, manufacturing chips for third-party designers like AWS. Key developments in this strategy include:
- 2021: $20 billion investment in two Arizona fabrication plants
- 2024: Rebranding as Intel Foundry and spinning it out as a subsidiary
- Global Expansion: Major construction projects worldwide, though delays were announced for Germany and Poland
Domestic Projects Face Challenges
While Intel plans $100 billion in U.S. investments by 2030, recent hurdles include:
- Postponement of two Ohio plants (originally $28 billion projects)
- Workforce reduction of 15,000 employees amid financial restructuring
- Widening losses in the Foundry division
Why This Matters for the U.S. Economy
The CHIPS Act funding addresses critical national priorities:
- Supply Chain Security: Reduces vulnerability exposed during pandemic shortages
- Job Creation: Thousands of high-tech manufacturing positions
- Technological Sovereignty: Ensures U.S. leadership in advanced semiconductor production
White House deputy chief of staff Natalie Quillian stated:
“Intel’s investments demonstrate how President Biden’s agenda is delivering for the American people through reshored manufacturing and economic strengthening.”
Looking Ahead
Beyond this grant, Intel recently secured a $3 billion contract to produce advanced semiconductors for U.S. national security programs. As geopolitical tensions highlight the strategic importance of chip manufacturing, Intel’s role in rebuilding domestic capacity becomes increasingly vital to America’s technological future.
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