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The U.S. government is awarding Intel (NASDAQ:INTC) about $20B in grants and potential loans, as the Biden administration aims to ramp up domestic manufacturing of semiconductors.
The U.S. Department of Commerce has proposed up to $8.5B in direct funding through the CHIPS and Science Act to advance Intel’s commercial semiconductor projects in Arizona, New Mexico, Ohio and Oregon.
Under the preliminary memorandum of terms, Intel would also have the option to draw upon federal loans of up to $11B. The company 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 $100B over five years.
The proposed funding supports Intel’s previously announced plans to invest over $100B in the U.S. over five years to boost U.S. chipmaking capacity and capabilities critical to economic and national security emerging technologies, such as AI.
“CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future,” said Intel CEO Pat Gelsinger.
Intel said that its investments are expected to create over 10,000 company jobs and about 20,000 construction jobs, and support over 50,000 indirect jobs with suppliers and supporting industries.
Last week, Pentagon, reportedly, ended its plan to put forth $2.5B on a grant for Intel.
The CHIPS Act funding aims to increase U.S. semiconductor manufacturing and research, especially in advanced semiconductors. Several companies are expected to get funds under the act, with Samsung Electronics (OTCPK:SSNLF) expected to be awarded more than $6B, while Taiwan Semiconductor Manufacturing (TSM) looks to be the beneficiary of a $5B federal grant for a chipmaking center in Arizona.