US Markets
Wednesday, March 20th, 2024 4:37 pm EDT
Key Points
- The White House announces up to $8.5 billion in CHIPS Act funding for Intel, with the possibility of an additional $11 billion in loans, as part of efforts to bolster semiconductor manufacturing in the United States.
- U.S. Secretary of Commerce Gina Raimondo emphasizes that the funding aims to support the production of “leading-edge semiconductors made in the United States,” positioning the country as a leader in innovation.
- Intel, a long-standing player in the U.S. semiconductor industry, plans to utilize the funds to establish fabs and research centers across several states, including Arizona, Ohio, New Mexico, and Oregon, aiming to create jobs and revitalize the domestic semiconductor industry.
The Biden administration has allocated up to $8.5 billion in CHIPS Act funding to Intel, with a potential additional $11 billion in loans, aiming to bolster semiconductor manufacturing in the United States. This announcement comes as President Joe Biden prepares to unveil the awards during his visit to Arizona. The funds aim to support the production of “leading-edge semiconductors made in the United States,” positioning the country at the forefront of innovation in the industry. While the agreement between Intel and the White House is preliminary and nonbinding, it underscores a concerted effort to strengthen domestic semiconductor manufacturing.
Intel, a prominent player in the U.S. semiconductor sector, has faced challenges in revenue and market cap compared to competitors like Nvidia, AMD, and Qualcomm. Despite this, Intel holds a unique position due to its ownership of chip factories, enabling both design and manufacturing processes. In contrast, companies like AMD and Nvidia operate as fabless entities, outsourcing manufacturing to facilities like Taiwan’s TSMC, which dominates advanced semiconductor manufacturing.
The CHIPS Act, designed to incentivize domestic chip technology, has long been anticipated as a boon for Intel, aligning with efforts to mitigate supply disruptions and geopolitical risks, particularly concerning Taiwan. Intel plans to utilize the funds to establish manufacturing facilities and research centers across several U.S. states, including Arizona, Ohio, New Mexico, and Oregon. The company’s ambitious $100 billion investment in U.S. programs and facilities underscores its commitment to regaining a leading position in semiconductor manufacturing by 2026.
Key among Intel’s initiatives is the construction of a new fab in Ohio, anticipated to cost over $20 billion and commence production in 2027 or 2028. This facility will focus on producing AI chips, potentially serving both Intel’s needs and those of other semiconductor companies. Intel projects significant job creation, with 20,000 positions expected in fab construction and 10,000 in chip manufacturing, contributing to the revitalization of the domestic semiconductor industry.
Other recipients of CHIPS Act funding include GlobalFoundries, Microchip, and BAE Systems, highlighting a broader effort to bolster semiconductor manufacturing capabilities in the U.S. TSMC is also expected to receive funds for a fab in Arizona, catering to the production of chips for Apple and AMD. Overall, the allocation of CHIPS Act funding to Intel underscores a strategic push to enhance domestic semiconductor manufacturing capacity, ensuring a secure and robust supply chain for critical technologies.
For the full origianl article on CNBC, please click here: https://www.cnbc.com/2024/03/20/intel-awarded-up-to-8point5-billion-from-chips-act-with-loans-available.html
