The Commerce Department said today it has reached a non-binding and preliminary agreement with U.S.-based semiconductor manufacturing giant Intel Corp. to provide the company with $8.5 billion of CHIPS and Science Act funding to support chip making projects in Arizona, New Mexico, Ohio, and Oregon.
President Biden signed the CHIPS and Science Act into law in August 2022, making up to $52 billion of funding available to incentivize semiconductor makers to establish new manufacturing operations in the United States.
The proposed $8.5 billion award to Intel announced today is by far the largest such funding announced for the CHIPS and Science Act to date, exceeding the preliminary agreement for $1.5 billion of funding announced in February for New York-based GlobalFoundries.
If the preliminary agreement between the Commerce Department and Intel pans out, the company would also get up to $11 billion in loans from the agency’s CHIPS Program Office. The 2022 law provides for up to $75 billion in loan authority, in addition to the $52 billion of direct funding authority.
The Commerce Department said today that Intel plans to make more than $100 billion of investments in its U.S.-based businesses over the next five years, and that the proposed $8.5 billion CHIPS and Science Act award “coupled with Intel’s investment, would mark one of the largest investments ever announced in U.S. semiconductor manufacturing.”
Intel’s five-year investment plan aims to create more than 10,000 manufacturing jobs and nearly 20,000 construction jobs.
The CHIPS and Science Act funding, the Commerce Department said, would “strengthen all major technical processes for leading-edge chips to occur in the United States” including through proposed investments in the following Intel facilities:
- Chandler, Ariz., where the company plans to build two new logic fabrication facilities and modernize one existing facility;
- Rio Rancho, N.M., where Intel plans to modernize two existing fabrication facilities into advanced packaging facilities;
- New Albany, Ohio, where the company plans to build two new fabrication facilities and expand foundry capacity; and
- Hillsboro, Ore., where Intel plans to expand and modernize technology development facilities.
The preliminary agreement announced today is far from done. The Commerce Department explained today that the “non-binding preliminary memorandum of terms” with Intel is subject to due diligence, negotiation of further documentation, and achievement of unspecified milestones.
“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,” said Commerce Secretary Gina Raimondo in a statement today. “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.”
“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor manufacturing innovation,” said Pat Gelsinger, CEO at Intel. “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.”
Raimondo said last month that over 600 semiconductor companies have requested more than $70 billion under the CHIPS and Science Act, and explained that Commerce Department has “a lot of tough conversations” ahead to narrow down which companies receive funding.
