The Biden-Harris administration has announced a US$7.87 billion funding agreement with Intel (NASDAQ:INTC) under the CHIPS Incentives Program as part of its efforts to bolster the US semiconductor manufacturing industry.
The award represents one of the most substantial semiconductor manufacturing investments facilitated by the CHIPS for America program.
Intel plans to invest over US$90 billion in the United States by the end of the decade, enhancing the US capacity for manufacturing leading-edge semiconductors. These advanced chips are integral to crucial industries such as artificial intelligence and defense systems.
The company’s expansion plan spans facilities in Arizona, New Mexico, Ohio and Oregon. The expansion is expected to generate approximately 10,000 permanent manufacturing jobs and 20,000 construction jobs across the four states involved.
The Department of Commerce’s direct funding will support Intel’s fabrication and packaging of these chips, addressing vulnerabilities in the global semiconductor supply chain.
Secretary of Commerce Gina Raimondo hailed the partnership as pivotal for revitalizing the domestic semiconductor industry and securing US technological leadership.
“The CHIPS for America program will supercharge American innovation and technology and make our country more secure,” she stated in the announcement.
Meanwhile, Intel’s CEO Pat Gelsinger reiterated the company’s commitment to advancing semiconductor manufacturing on American soil, citing bipartisan support as a driving force behind the company’s investment strategy.
Intel’s semiconductor manufacturing process technologies, including Intel 3 and Intel 18A , are poised to contribute significantly to the US domestic semiconductor ecosystem.
CHIPS for America, part of the broader CHIPS and Science Act, is a cornerstone of the current administration’s economic agenda.
The initiative aims to re-shore critical manufacturing capabilities and stimulate economic growth, enhancing US competitiveness and addressing economic vulnerabilities.
Overall, CHIPS for America has allocated approximately US$19 billion in incentives to date, supporting projects across 20 states and facilitating the creation of an estimated 125,000 jobs.
Public investments in the semiconductor and electronics industries have played a large role in catalyzing over US$450 billion in private sector commitments in these industries since the beginning of the Biden-Harris administration.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.