WASHINGTON (AP) — The Biden administration has agreed to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants in Arizona, Ohio, New Mexico, and Oregon.
President Joe Biden will highlight the investment during his visit to Intel’s campus in Chandler, Arizona, on Wednesday. This visit is significant as Arizona could play a crucial role in the upcoming election. Biden believes that more voters would support him if they were aware of his economic policies.
Commerce Secretary Gina Raimondo announced that the deal, facilitated through her department, aims to increase the United States’ production of advanced chips to 20% of the global market by 2030. Currently, the U.S. designs advanced chips but lacks domestic manufacturing capabilities, posing national security and economic risks.
Raimondo emphasized the importance of producing chips in America, stating, “We can’t just design chips. We have to make them in America.”
The funding announcement comes amid the 2024 presidential campaign, with Biden touting his policies for revitalizing U.S. manufacturing and job growth. This contrasts with former President Donald Trump’s tariff policies and his focus on protecting U.S. factory jobs from China.
Intel’s projects will be supported by the bipartisan 2022 CHIPS and Science Act, which aims to address concerns about U.S. economic stability following the pandemic. Lawmakers have expressed worries about China’s influence over Taiwan, a significant chip producer.
The investment in Intel’s projects is expected to create thousands of jobs and bolster the semiconductor industry. The company plans to use the government support to make significant capital investments over the next five years.
Intel CEO Pat Gelsinger described the funding as a defining moment for the semiconductor industry and called the CHIPS Act “the most critical industrial policy legislation since World War II.” He expressed a desire for additional funding to support the industry further.
The Biden administration believes that without government support, chip companies would not invest in domestic production at the same scale. The investment in Intel is projected to create 30,000 jobs and includes tax credits for qualified investments.
Intel will use the funding to build and modernize chip plants in Arizona, Ohio, New Mexico, and Oregon. The company will also focus on workforce training and affordable child care as part of the agreement with the Commerce Department.
Josh Boak, The Associated Press
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