Since its enactment in 2022, the CHIPS and Science Act, a pivotal reform initiative of the Biden Administration has faced considerable stagnation despite its authorization of $280 billion in fresh funding to elevate the technological prowess of the United States. Notably, a significant portion of this allocation, amounting to $52.7 billion was earmarked to fortify the research and development (R&D) as well as manufacturing capabilities in the semiconductor sector. Progress in this area had been slow until a recent change of events brought a shift from stagnation.
All About Intel Securing Federal Funding and Tax Credit
The Biden Administration announced a move indicating an influx of funding towards Intel with expected grants for Samsung and TSMC to follow in the next few weeks. As per the statement released by the US Commerce Department Intel has engaged in discussions outlining federal grants of up to $8.5 billion and loans of up to $11 billion under the CHIPS Act.
Furthermore, Intel plans to utilize the Investment Tax Credit (ITC) offered by the US Treasury Department, which could make up 25 percent of its estimated investments amounting to around $100 billion within the country. These investments will lead to establishments including a fabrication plant in Arizona, a packaging center in New Mexico, an innovative manufacturing hub in Ohio, and an R&D facility in Oregon.
It’s worth mentioning that Intel’s initiatives in Columbus Ohio aim to create what Pat Gelsinger, the company’s CEO envisions as “the AI chip manufacturing site by 2027. Intel had requested more than $10 billion in funding from the Biden Administration. Gelsinger highlighted the importance of the company in advancing US interests to dominate the semiconductor industry thus justifying its claim to a share of the CHIPS Act funding.
In fact, Intel had been strategically delaying its planned investments in the US as a means to pressure the Biden Administration into acceding to its demands. The recent development is poised to significantly address the company’s fundamental requirements, thereby clearing the path for Intel’s anticipated investments to finally gain momentum.
