Intel and Biden Administration join forces, unveiling $8.5 billion direct funding for CHIPS Act.

The US government has announced an agreement with Intel, which aims to strengthen the country's semiconductor industry. The chipmaker could receive up to $8.5 billion in direct funding for commercial projects, with Intel planning to invest over $100 billion in the sector over the next five years.

Intel's partnership with the U.S. Department of Commerce could result in up to $8.5 billion in direct funding for commercial semiconductor projects.
The proposed funding would play a crucial role in advancing Intel's semiconductor manufacturing and research projects at its facilities in Arizona, New Mexico, Ohio, and Oregon.
The CHIPS Act proposed funding represents one of the largest public-private investments ever made in the American semiconductor industry, expected to create numerous job opportunities and stimulate U.S.-based research and development.

In a significant move towards bolstering the semiconductor industry in the United States, the Biden-Harris Administration has announced a non-binding preliminary memorandum of terms (PMT) between Intel and the U.S. Department of Commerce. Under the CHIPS and Science Act, Intel could receive up to $8.5 billion in direct funding for commercial semiconductor projects. The funding aims to enhance semiconductor manufacturing and research and development capabilities, particularly in semiconductors.

Intel holds a unique position as the only American company involved in both the design and manufacturing of advanced logic chips. The proposed funding would play a crucial role in advancing Intel’s semiconductor manufacturing and research projects at its facilities in Arizona, New Mexico, Ohio, and Oregon. These sites are responsible for the development and production of some of the world’s most advanced chips and semiconductor packaging technologies.

Intel CEO Pat Gelsinger expressed his enthusiasm for the partnership, stating, “Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation. AI is supercharging the digital revolution, and everything digital needs semiconductors. CHIPS Act support will help 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.”

When combined with Intel’s previously announced plans to invest over $100 billion in the U.S. over five years, the CHIPS Act proposed funding represents one of the largest public-private investments ever made in the American semiconductor industry. This historic investment is expected to create numerous job opportunities, stimulate U.S.-based research and development, strengthen domestic supply chains, and maintain American leadership in advanced semiconductor manufacturing and technology capabilities.

The announcement reflects the U.S. government’s confidence in Intel’s leadership and commitment to expanding chipmaking capacity and capabilities within the country. It is seen as a crucial investment in America’s technological future, bringing innovation, opportunities, and jobs to the nation.

U.S. Secretary of Commerce Gina Raimondo highlighted President Biden’s dedication to revitalizing American manufacturing, stating, “With this agreement, we are helping to incentivize over $100 billion in investments from Intel – marking one of the largest investments ever in U.S. semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation.”

Under the PMT, Intel would also have the option to access federal loans of up to $11 billion. Additionally, Intel plans to take advantage of the U.S. Treasury Department’s Investment Tax Credit (ITC), which is expected to cover up to 25% of qualified investments exceeding $100 billion over five years. The finalization of the direct funding award and federal loans is contingent upon due diligence and negotiation of a long-form term sheet and award documents. These agreements are also subject to the achievement of specific milestones and the availability of funds.

Intel’s strategy revolves around three core elements: establishing process technology leadership, building a resilient and sustainable global semiconductor supply chain, and creating a world-class Foundry business. These align with the objectives of the CHIPS Act, which aims to promote semiconductor manufacturing and technology leadership in the United States.

In addition to its substantial investments in expanding U.S. manufacturing capacity, Intel is on track to introduce five semiconductor process nodes within four years. The company expects to reclaim process technology leadership by 2025 with Intel 18A. Recently, Intel expanded its process technology roadmap to include the more advanced Intel 14A node, along with various specialized node evolutions.

Intel Foundry, known as the world’s first systems foundry for the AI era, brings together Intel’s Technology Development, Global Manufacturing and Supply Chain, and foundry customer service and ecosystem operations. This integration enables customers to design and manufacture chips for the new era of AI-driven computing. Intel Foundry offers full-stack optimization, from the factory network to software, and provides customers with readiness for Intel process and packaging designs. The ecosystem is supported by a wide range of intellectual property and electronic design automation partners.

Intel remains committed to advancing U.S. manufacturing and research and development efforts in the semiconductor industry. The proposed CHIPS Act funding will support Intel’s investments in Arizona’s Silicon Desert, New Mexico’s Silicon Mesa, Ohio’s Silicon Heartland, and Oregon’s Silicon Forest.

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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

Foundry: A foundry is a dedicated manufacturing facility focused on producing semiconductor components like integrated circuits (ICs) for external clients. These foundries are pivotal in the semiconductor industry, providing diverse manufacturing processes and technologies to create chips based on designs from fabless semiconductor firms or other customers. This setup empowers companies to concentrate on innovative design without needing substantial investments in manufacturing infrastructure. Some well-known foundries include TSMC (Taiwan Semiconductor Manufacturing Company), Samsung Foundry, GlobalFoundries, and UMC (United Microelectronics Corporation).