Biden: $8.5B in direct CHIPS Act funding, more awarded to Intel

The U.S. Department of Commerce and Intel announced in Arizona–with President Joe Biden and U.S. Secretary of Commerce Gina Raimondo in attendance–that they have signed a non-binding preliminary memorandum of terms (PMT) for up to $8.5 billion in direct funding to Intel for commercial semiconductor projects under the CHIPS and Science Act.

The funding will address fab projects in Arizona, New Mexico, Ohio, and Oregon that previously were announced by Intel, all of them part of a plan by Intel to invest more than $100 billion in U.S.-based semiconductor manufacturing capacity over the next five years.

"This is a landmark agreement signed as part of the CHIPS and Science Act between my administration and Intel for up to $8.5 billion," Biden said during remarks at the Arizona event. "It's a smart investment, and one that's being paired with a $100 billion investment by Intel."

Intel also expects to benefit from a U.S. Treasury Department Investment Tax Credit (ITC) of up to 25% on more than $100 billion in qualified investments and eligibility for federal loans up to $11 billion. The potential loan draw combined with the direct funding put Intel’s federal government assistance at close to $20 billion.

Raimondo said at the Arizona event that this funding is part of what is needed for the U.S. semiconductor industry to reverse course on a historical trend of seeing many of its chips manufactured in Asia and elsewhere.

“We are changing that course, and we're beginning to revitalize the semiconductor industry, an industry that was started in the United States of America,” Raimondo said. “And we're going to lead again in the United States of America, including foundries making the best chips in the world with American workers in the United States of America.” 

Also speaking during the Arizona event was Intel CEO Pat Gelsinger, who said, "It's fitting that we are standing here on an Intel construction site because these investments, these extraordinary commitments, are being used to build a new future right here in America, right here in Arizona." Hoe also touted the h=jobs that will be created through Intel’s investments, including more than 10,000 company jobs and nearly 20,000 construction jobs in Arizona and a total of 80,000 construction jobs across Arizona, New Mexico, Ohio and Oregon, as well as indirect support for more than 50,000 jobs with suppliers and supporting industries.

This week’s announcement comes after Intel last month acknowledged a delay in its Ohio fab project, which some observers attributed to the glacial pace of CHIPS Act funding becoming available.