Intel will receive $7.86bn in direct funding under the CHIPS and Science Act to advance its semiconductor manufacturing and packaging sites in Arizona, New Mexico, Ohio, and Oregon.
The US technology company finalised an agreement with the US Department of Commerce for the funding. This follows a non-binding preliminary memorandum of terms to provide up to $8.5bn in direct funding under the Act in March 2024.
Intel will invest more than $100bn in the US to expand chipmaking and advanced packaging capacity and capabilities critical to economic and national security.
With this mega-investment, Intel also hopes to claim the US Treasury Department’s Investment Tax Credit, which is expected to be up to 25% of qualified investments of more than $100bn.
Read more: US finalises 25% tax credit for semiconductor manufacturing under CHIPS Act
Finalised rules for the credit state that the ITC is typically 25% of the cost of qualified property in an eligible taxpayer’s advanced manufacturing facility if the property is put into use after 31st December 2022 and the construction started after the CHIPS and Science Act was passed on 9th August 2022.
In addition to supporting the US semiconductor market, the company’s effort is also expected to support more than 10,000 company jobs, nearly 20,000 construction jobs, and more than 50,000 indirect jobs with suppliers and supporting industries.
Pat Gelsinger, CEO of Intel, said, “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security.”
Intel was founded in the US and has been innovating, investing, and supporting global semiconductor manufacturing and R&D for over 50 years. Intel currently employs approximately 45,000 people in the US.
The company will next year (2025) launch its semiconductor node development, Intel 18A. Intel is finalising a multiyear, multibillion-dollar commitment by Amazon Web Services to expand its existing partnership to include a new custom Intel® Xeon® 6 chip on Intel 3 and a new AI fabric chip on Intel 18A.
US Secretary of Commerce Gina Raimondo recognised the CHIPS and Science Act’s role in supporting major developments such as Intel’s and others similar.
She said, “The CHIPS for America programme will supercharge American technology and innovation and make our country more secure – and Intel is expected to play an important role in the revitalisation of the US semiconductor industry.”
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