More than two years after President Joe Biden signed the CHIPS Act, Intel and the Commerce Department have finally agreed to terms for the $7.9 billion federal grant that will fund some of the semiconductor giant’s new plant in Ohio and other expansions in the U.S.
“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” Intel CEO Pat Gelsinger said, referring to various Intel chip-making technologies. “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security.”
He added that Intel sees the nearly $8 billion grant as the first stage of public funding for the company’s efforts. Intel also plans to claim the U.S. Treasury Department’s Investment Tax Credit, which is expected to be up to 25% of qualified investments of more than $100 billion. With the new plant in Ohio under construction and plant expansions in Arizona, New Mexico and Oregon, the company expects to easily clear that $100 billion investment figure.
Passed in 2022 with bipartisan support, the CHIPs Act spurred investments by Intel, Taiwan Semiconductor (TSMC), Micron and many others to invest in U.S. chip production. Early in the pandemic, a rush of consumer purchases of electronics created massive chip shortages worldwide, massively disrupting supply chains and idling car plants and other facilities as near-finished products waited for critical chips.
“The CHIPS for America program will supercharge American innovation and technology and make our country more secure – and Intel is playing an important role in the revitalization of the U.S. semiconductor industry through its unprecedented investments across Arizona, New Mexico, Ohio and Oregon,” said U.S. Secretary of Commerce Gina Raimondo. She added that the funding award is “enabling Intel to drive one of the most significant semiconductor manufacturing expansions in U.S. history.”
In early 2021, Intel announced plans for the Ohio plant. At the time, the CHIPs Act was stalled in Congress, and company officials said the project in Licking County near Columbus would start with or without federal support – but federal cash would justify expanding plans and hiring thousands of well-paying jobs sooner rather than later.
Since passage of the act, rules makers in the Commerce Department had to create policies in rules for handing out the funding, a process that officials with Intel, TSMC and others have called painfully slow. In Intel’s case, direct funding had been set for $8.5 billion earlier in the process, but the government cut back on that number following Intel’s decision to delay completion of portions of the Ohio plant.
Following those delays, the Intel Ohio facilities should go into production in 2026 or 2027.
