Intel and administration announce up to $8.5 billion under CHIPS, Science Act

SANTA CLARA, Calif., & WASHINGTON, D.C. – The Biden-Harris Administration announced that Intel and the U.S. Department of Commerce have signed a non-binding preliminary memorandum of terms (PMT) for up to $8.5 billion in direct funding to Intel for commercial semiconductor projects under the CHIPS and Science Act.

CHIPS Act funding aims to increase U.S. semiconductor manufacturing and research and development capabilities, especially in leading-edge semiconductors. The proposed funding would help advance Intel’s critical semiconductor manufacturing and research and development projects at its sites in Arizona, New Mexico, Ohio and Oregon, where the administration said the company develops and produces many of the world’s most advanced chips and semiconductor packaging technologies.

“Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation,” said Intel CEO Pat Gelsinger. “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.”

Proposed funding for the CHIPS Act and Intel’s previously announced plans to invest more than $100 billion in the U.S. over five years constitute one of the largest public-private investments ever made in the U.S. semiconductor industry.

“There is no one who cares more about revitalizing American manufacturing than President Biden, and today’s announcement 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,” said U.S. Secretary of Commerce Gina Raimondo. “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.”

Per the PMT, Intel would also have the option to draw upon federal loans of up to $11 billion. Intel said it also plans to claim the U.S. Treasury Department’s Investment Tax Credit (ITC), which is expected to be up to 25% of qualified investments of more than $100 billion over five years. The PMT provides that the direct funding award and federal loans are subject to due diligence and negotiation of a long-form term sheet and award documents, and are conditional on the achievement of certain milestones and remain subject to availability of funds.

President Biden delivered remarks on the PMT and its investment in semiconductor funding during a visit to Arizona that can be found here.