Intel in Talks for $10 Billion in Subsidies Under CHIPS and Science Act: Bloomberg Report
The U.S. government is reportedly in discussions to provide Intel with over $10 billion in subsidies under the CHIPS and Science Act, according to a Bloomberg report citing sources familiar with the matter. If accurate, this would be the largest award package announced under the act, which aims to revitalize domestic semiconductor production.
The potential financial package for Intel is expected to include loans and direct grants, although the exact distribution between these is still being negotiated. This funding is part of a larger allocation of $39 billion in direct grants and $75 billion in loans and guarantees under the CHIPS Act, designed to attract top semiconductor firms to establish manufacturing bases in the United States.
While neither Intel nor the U.S. Commerce Department has formally confirmed the $10 billion package, Intel has been a candidate to receive government subsidies for some time. Since President Joe Biden took office, chip companies have already invested over $230 billion in the United States, as part of the administration’s goal to create at least two advanced manufacturing clusters on American soil by the end of the decade.
Intel itself is making significant investments in expanding its manufacturing capabilities. The company is currently building its first brand-new site in Ohio, which is expected to require investments of over $100 billion to be fully operational. The project will consist of two fabs, with an initial investment of around $20 billion. While there may be some delays, the site is still expected to become operational within this decade. Additionally, Intel is investing $20 billion in expanding its facilities in Arizona and $3.5 billion in its New Mexico site. However, the success of these expansion plans largely depends on the anticipated government funding.
Other major players in the semiconductor industry are also expanding their presence in the United States due to anticipated government support. TSMC, for example, has established its first campus in Arizona to produce chips using advanced manufacturing nodes. The company plans to start with 4nm and 5nm-class process technologies and eventually expand to produce 3nm-class chips. However, the success of this project is also contingent on government funding.
Companies like GlobalFoundries, Micron, Samsung, and Texas Instruments are also increasing their investments in the United States, encouraged by the expected government support. The U.S. Commerce Department has already distributed smaller grants under the CHIPS Act to various companies and anticipates making more substantial announcements in the coming months.
The push to revitalize domestic semiconductor production is seen as crucial for national security and economic competitiveness. With the increasing demand for semiconductors in various industries, including automotive and consumer electronics, ensuring a robust and reliable supply chain is of utmost importance. The government’s efforts to incentivize major semiconductor firms to establish manufacturing bases in the United States will not only create jobs but also reduce reliance on foreign suppliers.
As discussions continue between Intel and the U.S. government regarding the $10 billion subsidy package, the semiconductor industry eagerly awaits further developments. The potential boost in funding would not only benefit Intel but also contribute to the overall growth and resilience of the U.S. semiconductor industry, positioning it as a global leader in advanced chip manufacturing.
