Intel Eyes Up To $8.5B In Federal Funds For Chip Making

Intel should also be eligible for federal loans up to $11 billion.

Intel stands to receive up to $8.5 billion in United States federal funding for commercial chip and semiconductor packaging projects in Arizona, New Mexico, Ohio and Oregon – one of the largest public-private investments ever made in the U.S. semiconductor industry.

The Santa Clara, Calif.-based chipmaker also expects a U.S. Treasury Department Investment Tax Credit (ITC) of up to 25 percent on Intel’s previously announced $100 billion in qualified investments over five years. Intel should also be eligible for federal loans up to $11 billion.

The $8.5 billion is part of a non-binding preliminary memorandum of terms (PMT) for direct semiconductor project funding under the U.S. Chips and Science Act, passed in 2022.

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Intel Federal Chips Act Funding

CRN has reached out to Intel and the U.S. Department of Commerce for comment. Intel is a member of CRN’s 2024 Channel Chiefs.

“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” Intel CEO Pat Gelsinger said in his company’s statement Wednesday. “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”

U.S. Secretary of Commerce Gina Raimondo said in the statement that the news “is a massive step towards ensuring America’s leadership in manufacturing for the 21st century.”

“With this agreement, we are helping to incentivize over $100 billion in investments from Intel – marking one of the largest investments ever in U.S. semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation,” Raimondo said. “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 U.S.”

In the U.S. Department of Commerce’s own statement released Wednesday, the agency says this is the fourth PMT under the Chips Act and that the Intel money includes about $50 million dedicated to the semiconductor and construction workforce. Intel itself has invested more than $250 million in workforce investments over the past five years.

Previous Chips Act PMTs have included $35 million for BAE Systems, $162 million for Microchip Technology and $1.5 billion for GlobalFoundries (GF).

The department can offer non-binding PMTs “after satisfactory completion of the merit review of a full application,” according to the statement. They are subject to due diligence and negotiation of a long-form term sheet and award documents. Intel has to achieve certain milestones to get the funding and the funding is subject to availability. The department can continue to negotiate and refine terms with Intel.

Intel expects to create more than 100,000 company jobs, 20,000 construction jobs and 50,000 indirect jobs with suppliers and supporting industries, according to the vendor.

For a site-specific breakdown of Intel’s planned spending:

The $11 billion in federal loans Intel is eligible for will require due diligence and negotiation of a long-form term sheet and award documents, according to Intel. They are conditional on the achievement of certain milestones and remain subject to availability of funds.

Meanwhile, Intel said in its statement that it is still “on track to to deliver five semiconductor process nodes in four years and expects to return to process technology leadership by 2025 with Intel 18A.”