US govt announces $20 bn in funds, loans to Intel

The US government has agreed to provide $8.5 billion to chipmaker Intel through direct. Additionally, the company will also receive $11 billion in loans under the CHIPS and Science Act. To be sure, the CHIPS and Science Act was signed into law by US President Biden in August, which authorises up to $280 billion to boost domestic research and manufacturing of semiconductors.

The funding will support the construction and expansion of Intel’s facilities in Arizona, Ohio, New Mexico, and Oregon. It is also expected to create 30,000 jobs while creating ‘tens of thousands of indirect jobs. Commerce Department Secretary Gina Raimondo said that it is one of the largest investments ever in US semiconductor manufacturing. Raimondo also added that the administration hopes to US’ share of advanced chip production from 0% to 20% by 2030, as reported by Reuters. The announcement also includes funding for training and developing local workforce, including  $50 million in dedicated CHIPS funding.

The US government’s Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, 2022, aims to incentivize technology companies to build semiconductor factories in the country. However, companies accepting federal funding for the same are barred from building high-tech facilities in China for the next 10 years. 

Intel presented its fourth-quarter earnings in January. The revenue was $15.4 billion, up 10 percent year-over-year (YoY), while the full-year revenue was down 14% YoY to $54.2 billion. “In 2024, we remain relentlessly focused on achieving process and product leadership, continuing to build our external foundry business and at-scale global manufacturing, and executing our mission to bring AI everywhere as we drive long-term value for stakeholders,” Pat Gelsinger, CEO, said.