Intel and the United States Department of Commerce announced on Wednesday that they had inked a preliminary agreement under which Intel will receive $8.5 billion in direct funding under the CHIPS and Science Act. Furthermore, Intel is being made eligible for $11 billion in low-interest loans under the same law, and is being given access to a 25% investment tax credit on up to $100 billion of capital expenditures over the next five years. The funds from the long-awaited announcement will be used to expand or build new Intel's semiconductor manufacturing plants in Arizona, New Mexico, Ohio, and Oregon, potentially creating up to 30,000 jobs.

"Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation," said Intel CEO Pat Gelsinger. "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."

Intel is working on several important projects, including new semiconductor production facilities and advanced packaging facilities. On the fab front, there are three ongoing projects: 

  • Firstly, Intel is expanding its chip production capacities in Arizona — the Silicon Desert campus — by constructing two additional fab modules capable of making chips on Intel 18A and 20A production technologies at a projected cost of around $20 billion. 
  • Secondly, the company is building its all-new Silicon Heartland campus in Licking County, near Columbus, Ohio. This extensive project is anticipated to require a total investment of $100 billion or more when fully developed, with an initial investment of around $20 billion for the first two fabrication modules, which are set to be completed in 2027 – 2028. 
  • Thirdly, Intel is expanding and upgrading its chip production, research, and development capabilities in its Silicon Forest campus near Hillsboro, Oregon. In particular, the company recently began installing a $380 million High-NA EUV tool in its D1X fab in Oregon.

Regarding advanced packaging facilities, Intel is about to complete the conversion of two of its fabs in its Silicon Mesa campus in New Mexico to advanced packaging facilities. These facilities will be crucial to building next-generation multi-chipset processors for clients, data center, and AI applications in the coming years, and which will be the largest advanced packaging operation in the US. Meanwhile, with advanced packaging capacity in New Mexico already in place, the state is set to concentrate vast advanced packaging capabilities to support Intel's ramp of leading-edge fabs in Arizona, Ohio, and Oregon.

To receive both the $8.5 billion in direct funding and the $11 billion in low-interest, long-term loans, Intel must comply with the terms set in the so-called preliminary memorandum of terms (PMTs). The PMT specifies that receiving direct funding and federal loans will only be provided after thoroughly reviewing and negotiating detailed agreements. These financial awards also depend on meeting specific milestone goals, which are not public, but are thought to include terms concerning investments, timing, and workforce developments. Finally, all of this funding is subject to the availability of remaining CHIPS Act funds.

On top of this direct financial assistance, if Intel meets the U.S. government's requirements, it can also access a 25% tax credit on up to $100 billion of qualified capital expenditures over the next five years. This will make Intel's CapEx – the most expensive part of building and outfitting a chip fab – 'cheaper' for the company and stimulate it to invest in the U.S.

"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," said U.S. Secretary of Commerce Gina Raimondo. "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."

Source: Intel

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  • PeachNCream - Friday, March 22, 2024 - link

    Ironically enough, the reasoning you're offering up to justify larger, heavier vehicles for safety mainly exists because of the proliferation of larger, heavier vehicles. As for driving, that's always been terrible, but thanks to population growth in the US and a lack of investment in transportation infrastructure, the arteries that carry vehicles are now insufficient. The per capita, if you will, of idiots at the helm of a vehicle hasn't really increased. Arguably though, the amount of weight and engine power at their disposal has increased as well - once again a state pushed by vehicle owners that are in turn pulled along into that thinking by marketing and peer pressure which only serves to stand out as yet another demonstrated example of human foolishness.
  • GeoffreyA - Saturday, March 23, 2024 - link

    PeachNCream. Though I expect it varies from country to country, the vehicle problem is worldwide. And the biggest producers of CO2 are the big GDP countries, including but not only the US, though per capita paints a different picture too.
  • GeoffreyA - Saturday, March 23, 2024 - link

    But, in my thinking, before we save the planet, we need to save people that are dying from wars happening right now and starvation.
  • PeachNCream - Saturday, March 23, 2024 - link

    Let's do both! Those aren't mutually exclusive things that we collectively can address at the same time in both large-scale ways as a global civilization and in small ways we can impact through our own decisions.
  • GeoffreyA - Saturday, March 23, 2024 - link

    Agreed. I must qualify it by saying that here in the Global South, and even a lot of the West, the first concern of many are the essentials of life before the luxury of worrying about Earth can even be reached. And don't get me wrong: I'm not advocating for a disregard of our planet.
  • blwest1978 - Tuesday, March 26, 2024 - link

    You are a prime example of human foolishness.
  • blwest1978 - Friday, March 22, 2024 - link

    Please take your misguided EV agenda elsewhere. This an article about the USA strengthening it's microchip manufacturing capability.

    I find it ripe that you are unable to see you are the person you describe others as being.

    Additionally, you've forgotten basic physics. EV's weigh at minimum 1000 pounds more than an equivalent ICE vehicle, be it a small sedan or a large truck.

    I'm not sure what has you so angry at the world and that you think you're mentally/morally superior, but you're not.

    I truly hope you find inner peace in this world.
  • PeachNCream - Friday, March 22, 2024 - link

    I'm not an advocate of any particular vehicle technology, electrical or otherwise. Assuming as much based on what you've read says more about you than me. Instead, I advocate an analysis of need versus want in light of the adverse impact excessive wants impose on the collective community of persons sharing this planet. I'm not surprised you lack the analytical skills to determine that without being led there given that it's quite clear you're seeing to impose a particular viewpoint that is, for reasons I cannot understand, now a politically loaded matter in the United States, and bend it to present yourself as the voice of reason that you so clearly are not.
  • Oxford Guy - Thursday, March 28, 2024 - link

    The weight of EVs isn't their biggest drawback if they're being powered primarily by solar energy, eh?
  • zodiacfml - Thursday, March 21, 2024 - link

    well played by Intel. Back then, it was absurd they were letting themselves behind vs TSMC and AMD. I think Toyota doing the same play, letting themselves behind on EVs.

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