Intel and the United States Department of Commerce introduced on Wednesday that they’d inked a preliminary settlement underneath which Intel will obtain $8.5 billion in direct funding underneath the CHIPS and Science Act. Furthermore, Intel is being made eligible for $11 billion in low-interest loans underneath the identical legislation, and is being given entry to a 25% funding tax credit score on as much as $100 billion of capital expenditures over the following 5 years. The funds from the long-awaited announcement will probably be used to increase or construct new Intel’s semiconductor manufacturing crops in Arizona, New Mexico, Ohio, and Oregon, doubtlessly creating as much as 30,000 jobs.
“Today is a defining second for the U.S. and Intel as we work to energy the following nice chapter of American semiconductor innovation,” mentioned Intel CEO Pat Gelsinger. “AI is supercharging the digital revolution and every part digital wants semiconductors. CHIPS Act help will assist to make sure that Intel and the U.S. keep on the forefront of the AI period as we construct a resilient and sustainable semiconductor provide chain to energy our nation’s future.“
Intel is engaged on a number of essential initiatives, together with new semiconductor manufacturing services and superior packaging services. On the fab entrance, there are three ongoing initiatives:
- Firstly, Intel is increasing its chip manufacturing capacities in Arizona — the Silicon Desert campus — by setting up two extra fab modules able to making chips on Intel 18A and 20A manufacturing applied sciences at a projected price of round $20 billion.
- Secondly, the corporate is constructing its all-new Silicon Heartland campus in Licking County, close to Columbus, Ohio. This in depth undertaking is anticipated to require a complete funding of $100 billion or extra when absolutely developed, with an preliminary funding of round $20 billion for the primary two fabrication modules, that are set to be accomplished in 2027 – 2028.
- Thirdly, Intel is increasing and upgrading its chip manufacturing, analysis, and growth capabilities in its Silicon Forest campus close to Hillsboro, Oregon. In specific, the corporate lately started putting in a $380 million High-NA EUV device in its D1X fab in Oregon.
Regarding superior packaging services, Intel is about to full the conversion of two of its fabs in its Silicon Mesa campus in New Mexico to superior packaging services. These services will probably be essential to constructing next-generation multi-chipset processors for shoppers, knowledge heart, and AI functions within the coming years, and which would be the largest superior packaging operation within the US. Meanwhile, with superior packaging capability in New Mexico already in place, the state is ready to pay attention huge superior packaging capabilities to help Intel’s ramp of modern fabs in Arizona, Ohio, and Oregon.
To obtain each the $8.5 billion in direct funding and the $11 billion in low-interest, long-term loans, Intel should adjust to the phrases set within the so-called preliminary memorandum of phrases (PMTs). The PMT specifies that receiving direct funding and federal loans will solely be offered after completely reviewing and negotiating detailed agreements. These monetary awards additionally rely upon assembly particular milestone objectives, which aren’t public, however are thought to incorporate phrases regarding investments, timing, and workforce developments. Finally, all of this funding is topic to the supply of remaining CHIPS Act funds.
On high of this direct monetary help, if Intel meets the U.S. authorities’s necessities, it may additionally entry a 25% tax credit score on as much as $100 billion of certified capital expenditures over the following 5 years. This will make Intel’s CapEx – the most costly a part of constructing and outfitting a chip fab – ‘cheaper’ for the corporate and…
