Intel will get $8.5 billion in CHIPS Act funding to support its US manufacturing efforts

Intel is getting a huge boost from the US government under the CHIPS and Science Act. The company could get up to $8.5 billion in direct funding from the government, according to the preliminary agreement it has reached with the Department of Commerce. That money will go towards the chipmaker's efforts to expand its manufacturing facilities in the United States, particularly plants designed to make leading-edge semiconductor chips meant for use in AI and other advanced applications.

The government's investment is expected to support Intel projects across four states, including the construction of two new leading-edge logic fabrication facilities and the modernization of another one in Chandler, Arizona, as well as the construction of two more fabs in New Albany, Ohio. It will also help Intel modernize two existing fabs in Rio Rancho, New Mexico and expand its facilities in Hillsboro, Oregon. The government's $8.5 billion funding will augment the company's $100 billion investment in US manufacturing over the next five years. And in case the company needs more money, it can borrow up to $11 billion from the US under the agreement. 

The Biden administration signed the CHIPS and Science Act into law back in 2022 in hopes of fostering domestic semiconductor research and manufacturing and of lessening American companies' reliance in Chinese suppliers. This is the administration's fourth CHIPS investment, and it's largest yet. If you combine Intel's own money with the government's funding, this is one of the biggest investments announced in US semiconductor manufacturing overall. In February, the government also announced that it was granting GlobalFoundries with $1.5 billion in funding under the CHIPS Act to help the AMD spinoff build new fab facilities. 

Intel's projects in those aforementioned regions are expected to create 20,000 construction and 10,000 manufacturing jobs. To help ensure that the local population can benefit from those projects, the government will also earmark $50 million in dedicated funding to train and develop the local workforce. The parties have agreed to these terms under a preliminary agreement only, though, and the Department of Commerce might change them, depending on the results of a comprehensive due diligence process on the proposed projects and any future renegotiations. 

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