The Biden administration has reached a preliminary agreement with Intel to provide up to $8.5 billion in direct funding under the CHIPS and Science Act, the White House announced on Wednesday. This funding is part of a broader effort to revitalize America's semiconductor manufacturing industry and reduce reliance on foreign countries for critical technology.
Intel, the only American company that both designs and manufactures leading-edge logic chips, plans to invest more than $100 billion over the next five years to expand its U.S. chipmaking capacity and capabilities. The CHIPS Act funding will support Intel's construction and expansion projects across four states: Arizona, Ohio, New Mexico, and Oregon. These investments are expected to create nearly 30,000 jobs directly and support tens of thousands of indirect jobs.
In addition to the direct funding, Intel could also receive up to $11 billion in loans tied to the CHIPS Act and benefit from a 25% Investment Tax Credit on its qualified investments. The combination of direct funding, loans, and tax credits constitutes one of the largest public-private investments ever made in the U.S. semiconductor industry.
The announcement highlights the scale of the Biden administration's push to subsidize semiconductor manufacturing on U.S. soil. Semiconductors, invented in America, power a wide range of technologies from smartphones to satellites. However, today, the United States produces less than 10% of the world's chips and none of the most advanced ones. The CHIPS Act aims to change that, with companies announcing over $240 billion in investments to bring semiconductor manufacturing back to the United States since President Biden took office.
Intel's investments are poised to strengthen local economies in Arizona, Ohio, New Mexico, and Oregon. In Arizona and Ohio, Intel's investments are among the largest private-sector investments in each state's history. The company has also prioritized sustainability, using 100% renewable electricity in its U.S. fabs and setting ambitious goals for water conservation and waste reduction.
Today's announcement is the fourth and largest preliminary agreement under the CHIPS Act, following earlier agreements with GlobalFoundries, Microchip Technology, and BAE Systems Electronic Systems. As Pat Gelsinger, Intel CEO, stated, "Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation".