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Intel awarded up to $8.5 billion in grants under the CHIPS Act, with billions more in loans available

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U.S. President Joe Biden listens to Intel CEO Pat Gelsinger as he attends the grand opening of Intel’s new semiconductor manufacturing plant in New Albany, Ohio, U.S., September 9, 2022.

Joshua Roberts | Reuters

The White House said Intel has received up to $8.5 billion in funding under the CHIPS Act, as the Biden administration ramps up efforts to bring semiconductor manufacturing to U.S. soil.

Intel could receive an additional $11 billion in loans under the CHIPS and Science Act, passed in 2022. Awards will be announced by President Joe Biden in Arizona on Wednesday.

The money will help “advanced American-made semiconductors” keep “America in the driver’s seat in innovation,” US Commerce Secretary Gina Raimondo said in a call with reporters. Intel and the White House have said their agreement is non-binding and preliminary and could change.

Intel has long been a mainstay of the U.S. semiconductor industry, developing chips that power many of the world’s PCs and data center servers. However, the company’s revenue was overshadowed by Nvidialeader in the field of artificial intelligence chips, and has been overtaken in terms of market capitalization by its rival AMD and mobile phone chip manufacturer Qualcomm.

Even with its decline relative to its peers, Intel is in a unique position in the industry because it operates chip factories, or fabs, in addition to designing processors. AMD and Nvidia are fabless, meaning they design the chip and then send computer files and personnel to Taiwan. TSMC for the manufacture of the device.

TSMC has dominated semiconductor manufacturing in recent years, so all of the world’s fastest processors are physically built in Taiwan.

That’s a key reason why Intel has long been considered one of the biggest beneficiaries of the Creating Practical Incentives to Produce Semiconductors (CHIPS) Act, which aimed to unlock nearly $53 billion in incentives. for domestic chip technology. One of the primary motivations for the CHIPS Act was to encourage companies to build factories on U.S. soil to avoid supply disruption in the event of a Chinese invasion of Taiwan.

Intel said it would dedicate its CHIPS Act funds to manufacturing plants and research centers in Arizona, Ohio, New Mexico and Oregon. The company previously announced plans to spend $100 billion on programs and facilities in the United States. Intel has announced plans to catch up in advanced manufacturing by 2026.

Intel’s Ohio factory will cost more than $20 billion and Intel has said it is expected to start production in 2027 or 2028. Intel is also expanding its manufacturing operations in Arizona and New Mexico. Intel says the projects will create jobs for 20,000 people in factory construction and 10,000 people in chip manufacturing.

The Ohio factory will make AI chips for Intel and potentially make AI chips for other semiconductor companies, Intel CEO Pat Gelsinger said on a call with journalists.

“Go stop by the Ohio site,” Gelsinger said. “Many cranes and concrete trucks are building what we believe will become the first large-scale manufacturing site, especially for AI chips in America.”

Global FoundriesMicrochip and BAE Systems have already received money under the CHIPS Act, according to to the Semiconductor Industry Association. TSMC should receive CHIPS Act funds for a plant in Arizona that will be used to Apple and AMD chips.

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