Intel clinches $19.5 billion in grants and loans from Biden to boost US chip output
investing.comBy Alexandra Alper and David Shepardson
WASHINGTON (Reuters) -The Biden administration said it is awarding Intel (NASDAQ:INTC) nearly $20 billion in grants and loans on Wednesday, supercharging the company's domestic semiconductor chip output and marking the government's largest outlay to subsidize leading-edge chip production.
President Joe Biden will announce the preliminary agreement for $8.5 billion in grants and up to $11 billion in loans for Intel in Arizona, where some of the funding to be used to build two new factories and modernize an existing one.
Commerce Department Secretary Gina Raimondo called it one of the largest investments ever in U.S. semiconductor manufacturing.
«It means leading-edge semiconductors made in the United States of America,» she said on Tuesday, noting that the administration hopes to increase the United States' share of advanced chip production from 0% to 20% by 2030 through the subsidy program.
The historic outlay shows the Biden administration is betting big on Intel as part of the 2022 CHIPS and Science Act, a bid to boost domestic semiconductor output with $52.7 billion in funding, including $39 billion in subsidies for semiconductor production and $11 billion for research and development.
It could also help Biden, who lags rival former Republican President Donald Trump in voter perceptions of their ability to manage the U.S. economy, to again take Arizona in November's presidential election. The Democrat narrowly won the Southwestern swing state in 2020.
The goal of the CHIPS Act is to reduce reliance on China and Taiwan, as the share of global semiconductor manufacturing capacity in the U.S. has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry
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