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Intel Receives $8.5B Grant to Ramp Up Chip Production

March 25, 2024 by Jake Hertz

The U.S. CHIPS Act is starting to materialize with a large sum of money going Intel’s way.

In July 2022, Congress passed the CHIPS Act to bolster the U.S. market presence in the semiconductor industry through strategic investments in research, development, and manufacturing. 

 

Biden and Gelsinger

U.S. President Joe Biden (right) and Intel CEO Pat Gelsinger (left). 
 

Intel, the largest developer and manufacturer of advanced semiconductor technology in the U.S., has announced that it has reached preliminary terms with the U.S. government to receive an $8.5B grant. This allocation of funds is the largest public investment in the U.S. semiconductor sector in history.

 

How Intel Plans to Use the Funding

According to Intel, the funds are earmarked for enhancing semiconductor manufacturing capabilities and research and development across Intel’s sites in Arizona, New Mexico, Ohio, and Oregon. 

In Arizona, Intel is investing over $32B to build two new fabs and modernize its existing Fab 32 to increase the output capacity of its 18A process. According to the company, this investment will indirectly support 3,000 new Intel jobs, 6,000 construction jobs, and thousands of other jobs.

In New Mexico, Intel will invest $4B to improve its manufacturing operations of advanced packaging technologies, including Foveros, Intel’s 3D packaging technology. This investment will indirectly add 700 new Intel jobs, 3,000 construction jobs, and 3,500 other jobs.

 

Intel executives and members of the Biden administration

Intel executives and members of the Biden administration. 
 

In Ohio, Intel will build two new chip factories at a cost of $28B. Intel claims these new factories will produce the most advanced semiconductor processors in the U.S. and provide extra capacity to Intel Foundry customers for domestic chip production. These investments are expected to add 3,000 Intel jobs and 7,000 construction jobs and contribute $2.8B to Ohio’s annual GDP.

Finally, in Oregon, Intel plans to invest over $36B in expanding and modernizing its technology development facilities. This includes developing 18A and 14A nodes using the “world’s first” high-numerical-aperture extreme ultraviolet (High-NA EUV) lighting tools. Major technologies developed in Oregon will include PowerVia backside power, quantum computing, and liquid cooling advancements.

 

The Impact of the $8.5B Grant

The funding allocated to Intel is a substantial chunk of the $52.7B budget set forth by the CHIPS Act and, as such, the U.S. government has high hopes for its impact.

By making funds available for new manufacturing facilities, the investment may catalyze Intel’s efforts to re-establish itself as the global leader in advanced semiconductor manufacturing and development. Because Intel is the United States’ largest semiconductor player, its success correlates to the success of the country’s semiconductor industry at large.

In the past decade, Intel has lost market share and technology dominance to Taiwan Semiconductor Manufacturing Company (TSMC), which is said to be years ahead of Intel in terms of adopting new manufacturing technology and equipment like EUV. With TSMC exceeding Intel’s capabilities, the United States has seen some of its major technology developers, such as Apple, Nvidia, and AMD, manufacture their leading technologies with TSMC.

 

Bolstering the Domestic Semiconductor Industry

The semiconductor industry is undoubtedly one of the most important global industries from political and economic standpoints. 

According to President Biden, the CHIPS Act grant represents a vote of confidence in bringing manufacturing back to America for American inventions. The Biden administration hopes that this funding will increase the U.S. share of advanced chip production from 0% to 20% by 2030.

 


 

All images used courtesy of Intel.