This morning, the White House and Intel announced a PMT or “preliminary memorandum of terms” for CHIPS Act funding. The deal would see multi-billion dollar packages along at least three key vectors for Intel to build new semiconductor manufacturing capabilities in the US. Pat Gelsinger hinted that the award was close with U.S. Secretary of
Commerce Gina Raimondo at the Intel Foundry 2024 event. A few weeks later, we now have some details.
Intel Gets Huge CHIPS Act Funding
Intel is getting billions in direct funding, but there is more going behind the award. The highlights are:
- $8.5B in direct funding
- Up to 25% a U.S. Treasury Department Investment Tax Credit (ITC) on more than $100B in qualified investments
- Eligibility for up to $11B in low interest federal loans
Together, it feels fair to say that the package outlined is worth tens of billions of dollars but sounds like it is going to give Intel benefits over the next few years. Usually investments and awards are summed over something like a 5-year period to make the numbers larger.
Still, the sheer amount of funding is large considering the CHIPS Act authorized around $280B in funding to boost domestic U.S. chip production, of which, only $52.7B is appropriated. Of the larger figure there was also $13B allocated for semiconductor research and training and around $174B for public sector research in science and technology. That $174B was for organizations like the Department of Energy, NASA, and so forth.
Final Words
Intel said it will use the funds to advance and expand its chipmaking and packaging capabilities in Arizona, New Mexico, Ohio, and Oregon centers. The press conference it happening a few minutes from STH in Arizona. Since it is an election year, Arizona, New Mexico, and Oregon went to Biden in 2020 with Arizona flipping from a red to a blue state with that election. Intel and the White House announced that the funding was expected to create around 10,000 Intel jobs and another 20,000 in the construction sector.
It may sound strange to say, but with Intel 18A still a few quarters from mass production, this CHIPS Act funding might be Pat Gelsinger’s biggest achievement as Intel CEO thus far. This gives Intel a big financial backing to go build fabs and increase domestic semiconductor manufacturing.
I wonder if this also means that Intel is moving towards entering the trusted foundry program so that various US government agencies can have their proprietary chips manufactured there. It has been a DoD priority to get a domestic supplier with state of the art fabs.
Bit sad to see that the Intel foundry leadership of yesteryear have been replaced with a company that only remains viable through government subsidies. I doubt that just money is going to allow them to catch up to TSMC tho…
Aren’t there a lot of strings attached to the funding? E.g. you have to hire a certain number of employees from certain backgrounds? Once you take the governments money you have to do what they say. Of course the same applies to a much larger degree in mainland China (the People’s Republic) – what about Taiwan?
Not holding my breath on this one.
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