Intel secures $7.865 billion for domestic chip manufacturing

The U.S. Department of Commerce announced a substantial funding package of $7.865 billion for Intel under the CHIPS and Science Act aimed at bolstering domestic semiconductor manufacturing. This funding is intended for manufacturing and advanced packaging projects at Intel facilities located in Arizona, New Mexico, Ohio, and Oregon. The allocation reflects a pivotal move to enhance American manufacturing and reduce reliance on foreign chip production, which has come into sharper focus due to supply chain disruptions observed during the global pandemic. Intel plans to expand its operations in alignment with this funding, demonstrating a commitment to restoring American technology and manufacturing leadership. The CHIPS and Science Act, signed into law by President Joe Biden in 2022, was designed to incentivize semiconductor production within the U.S. and stimulate job creation. Intel's CEO, Pat Gelsinger, expressed that the investment is a critical component for the company’s growth as it transitions to a foundry model, where it manufactures chips for other companies. This transition has required Intel to significantly boost its production capacity, leading to plans for several new fabrication facilities, including two large plants in Ohio. Despite its ambitious expansion goals that include a total planned investment of around $100 billion in domestic manufacturing across various states, Intel has faced challenges. In recent years, losses within its Foundry business have widened, and regulatory hurdles have hampered a previously planned merger with Tower Semiconductor. Nonetheless, the collaboration with Tower now focuses on a partnership model where Intel provides manufacturing capacity. The funding awarded today counters challenges ahead as the semiconductor industry underwent significant transformation during the pandemic, necessitating a re-evaluation of U.S. dependence on international chip suppliers. Officials from the Biden administration highlighted this funding as part of a broader effort to reshore manufacturing, create thousands of good-paying jobs, and strengthen the economy, pointing to the historic bipartisan support driving these investments.