Biden allocates ‘single biggest’ multibillion-dollar grant to Intel to boost semiconductor production in US
President Joe Biden’s administration on Wednesday (March 20) announced it is allocating nearly $20 billion to Intel in grants and loans to enhance semiconductor production in Arizona. Along with the $8.5 billion grant, Intel is also eligible for $11 billion in loans under the 2022-passed CHIPS and Science Act. This move aims to strengthen the semiconductor industry in the United States and lessen dependence on East Asian technology.
Speaking about the grant, Commerce Secretary Gina Raimondo said, “This eight-and-a-half billion dollars will be the single biggest announcement of a grant to any chip’s recipients. Last month, I set an aggressive goal for the CHIPS program that America would produce roughly 20% of the world’s leading-edge chips by the end of the decade, and this announcement is going to put us on track to meet that goal.”
Why does this matter?
The initiative comes from the $39 billion CHIPS and Science Act, signed into law on August 9, 2022, reflecting a strategic move to compete with China. However, obstacles like workforce expertise and factory delays pose challenges that need addressing. The act authorises and sets aside funding for “Creating Helpful Incentives to Produce Semiconductors” (CHIPS) in the United States.
Inside global chip wars
The race for computer chips signifies a geopolitical shift, with Southeast Asia emerging as a key player in the semiconductor supply chain. Companies are eager for federal subsidies to fuel advanced semiconductor production.
How important is this grant for Intel?
The grant comes as a blessing for Intel as it has not relived its glory days post-pandemic. Led by CEO Patrick Gelsinger, Intel aims to reclaim its technology lead and bolster US chip production. Gelsinger’s ambitious plans include multiple production processes and a shift in Intel’s business model towards foundry services. Commenting on the grant, Gelsinger said, “Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor manufacturing innovation.”
Intel’s expansion campaign spans across various locations worldwide, driven by Gelsinger’s advocacy for the CHIPS Act. Despite facing slowdown in computer sales post-pandemic, Intel remains committed to financing its expansion efforts.
