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US unveils some $20 billion in grants, loans to Intel

March 21, 2024 - 09:57 By Yonhap
U.S. President Joe Biden tours the Intel Ocotillo Campus, in Chandler, Arizona, US on Wednesday. (Reuters-Yonhap)

The White House announced a plan Wednesday to award Intel Corp. nearly $20 billion in grants and loans, marking the Joe Biden administration's largest funding scheme under its initiative to strengthen domestic semiconductor production.

The Department of Commerce has reached a preliminary agreement with Intel to provide up to $8.5 billion in grants and $11 billion in loans under the CHIPS and Science Act, it said, as South Korea's Samsung Electronics Co. and Taiwan Semiconductor Manufacturing Co. are also expected to win grants.

President Biden made the official announcement on the agreement designed to support the construction and expansion of Intel facilities in Arizona, Ohio, New Mexico and Oregon, during a visit to an Intel campus in Chandler, Arizona -- one of the battleground states in the election season.

His incentive program is part of a high-profile effort to reduce America's reliance on foreign chipmakers, revitalize domestic manufacturing and sharpen its global technology leadership, after it suffered supply chain vulnerabilities during the COVID-19 pandemic.

Though semiconductors were invented in America, the United States produces less than 10 percent of the world's chips and none of the most advanced ones, the White House said in a fact sheet. The Biden administration seeks to produce 20 percent of the world's leading-edge chips in the US by 2030.

"Companies have announced over $240 billion in investments to bring semiconductor manufacturing back to the United States since the President took office. Semiconductor jobs are making a comeback," the White House said.

In a separate press release, the Commerce Department noted that over the next five years, Intel expects its investments in the US to exceed $100 billion as it expands capacity in the four states, estimated to create over 10,000 manufacturing jobs and nearly 20,000 construction jobs.

"This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the US," Commerce Secretary Gina Raimondo said.

The CHIPS Act provides $39 billion in grants. The Commerce Department plans to invest about $28 billion of the total in incentives for leading-edge chipmakers, Raimondo has said.

Wednesday's funding announcement marks the fourth award of such a grant under the act, after the American subsidiary of BAE Systems Plc, Microchip Technology Inc. and GlobalFoundries were previously selected as beneficiaries. (Yonhap)