Intel Secures $8.5B in CHIPS Act Funding, Gains Loans for US Fab Construction

Intel receives $8.5 billion in funding and becomes eligible for $11 billion in low-interest loans and a 25% tax credit under the CHIPS and Science Act, setting to expand or establish new semiconductor plants in multiple states and create up to 30,000 job opportunities.

Intel will receive $8.5 billion in direct funding under the CHIPS and Science Act, providing financial support for the company's expansion and job creation.
The company will also be eligible for $11 billion in low-interest loans and a 25% investment tax credit on up to $100 billion of capital expenditures over the next five years, making it more affordable for Intel to invest in the U.S.
The collaboration between Intel and the U.S. Department of Commerce will lead to the creation of up to 30,000 job opportunities, boosting the economy and providing well-paying jobs for Americans.

Intel and the United States Department of Commerce have reached a significant agreement, with Intel set to receive $8.5 billion in direct funding under the CHIPS and Science Act. Additionally, Intel will be eligible for $11 billion in low-interest loans and a 25% investment tax credit on up to $100 billion of capital expenditures over the next five years. These funds will be utilized to expand or establish new semiconductor manufacturing plants in Arizona, New Mexico, Ohio, and Oregon, potentially generating up to 30,000 job opportunities.

Intel CEO Pat Gelsinger expressed his enthusiasm, stating that this collaboration marks a pivotal moment for both Intel and the U.S. as they strive to lead the way in American semiconductor innovation. Gelsinger emphasized the importance of semiconductors in powering the digital revolution, particularly with the acceleration of artificial intelligence (AI). The support from the CHIPS Act will contribute to building a resilient and sustainable semiconductor supply chain that will drive the nation’s future.

Intel is actively engaged in several significant projects, including the development of new semiconductor production facilities and advanced packaging facilities. On the manufacturing front, three key projects are underway:

1. Expansion of chip production capacities in Arizona: Intel plans to construct two additional fab modules at its Silicon Desert campus. These modules will leverage Intel’s 18A and 20A production technologies, with an estimated cost of approximately $20 billion.

2. Establishment of the Silicon Heartland campus in Ohio: Intel is building a new campus in Licking County, near Columbus. This extensive project is expected to require a total investment of $100 billion or more upon completion. The initial phase involves investing around $20 billion to construct the first two fabrication modules, scheduled for completion between 2027 and 2028.

3. Upgrades to the Silicon Forest campus in Oregon: Intel is expanding and enhancing its chip production, research, and development capabilities at its Silicon Forest campus near Hillsboro. Notably, the company has recently begun installing a $380 million High-NA EUV tool in its D1X fab.

In terms of advanced packaging facilities, Intel is nearing the completion of converting two fabs at its Silicon Mesa campus in New Mexico. These facilities will play a crucial role in manufacturing next-generation multi-chipset processors for clients, data centers, and AI applications. They are poised to become the largest advanced packaging operation in the United States. Moreover, New Mexico will concentrate its advanced packaging capabilities to support Intel’s leading-edge fabs in Arizona, Ohio, and Oregon.

To access the $8.5 billion in direct funding and $11 billion in low-interest loans, Intel must comply with the terms outlined in the preliminary memorandum of terms (PMTs). These terms involve detailed agreements that need to be reviewed and negotiated before the financial assistance is granted. Meeting specific milestone goals is also a requirement, although the specifics of these goals have not been disclosed publicly. The availability of remaining CHIPS Act funds will also impact the funding.

In addition to the financial assistance, Intel has the opportunity to benefit from a 25% tax credit on up to $100 billion of qualified capital expenditures over the next five years. This incentive aims to make Intel’s capital expenditures more affordable and encourage further investment within the United States.

U.S. Secretary of Commerce Gina Raimondo expressed her satisfaction with the agreement, highlighting that it incentivizes over $100 billion in investments from Intel. She emphasized that this substantial investment in U.S. semiconductor manufacturing will not only create more than 30,000 well-paying jobs but also ignite the next wave of innovation. Raimondo credited President Biden and bipartisan efforts in Congress for their work in ensuring that chips crucial for economic and national security are manufactured domestically.

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About Intel:

Intel Corporation, a global technology leader, is for its semiconductor innovations that power computing and communication devices worldwide. As a pioneer in microprocessor technology, Intel has left an indelible mark on the evolution of computing with its processors that drive everything from PCs to data centers and beyond. With a history of advancements, Intel's relentless pursuit of innovation continues to shape the digital landscape, offering solutions that empower businesses and individuals to achieve new levels of productivity and connectivity.

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Technology Explained

EUV: Extreme Ultraviolet Lithography (EUV or EUVL) is an advanced semiconductor manufacturing technique that employs extremely short wavelengths of light in the extreme ultraviolet spectrum to create intricate patterns on silicon wafers. Utilizing a wavelength around 13.5 nanometers, significantly shorter than traditional lithography methods, EUVL enables the production of smaller and more densely packed integrated circuits, enhancing the performance and efficiency of modern microprocessors and memory chips.