The US Commerce Department said on Wednesday that tech giant Intel would receive US$19.5 billion to construct and modernise its semiconductor factories in four US states, marking the largest investment ever in American chip manufacturing.

The multibillion-dollar deal will provide US$8.5 billion in direct funding and up to US$11 billion in loans to advance the development of cutting-edge logic chips essential to advanced technologies like artificial intelligence and military systems.

US President Joe Biden will visit Intel’s campus in Arizona on Wednesday to make an official announcement and underscore the significance of “strengthening US supply chains and protecting national security”, the White House said.

The US produces less than 10 per cent of the world’s chips and none of the most advanced ones.


Biden tours new Taiwanese chip-making plant in Arizona, fans US-China semiconductor rivalry

Biden tours new Taiwanese chip-making plant in Arizona, fans US-China semiconductor rivalry

In 2022, Biden signed the US$50 billion Chips and Science Act into law with an aim to restore home-grown production of the tiny brains powering modern gadgets.

The initiative comes as Beijing expands its efforts to reduce its reliance on imported chips.

In Arizona, Intel is building two new chips factories and expanding an existing one. By 2025, the company aims to deploy its latest chip production technology, known as 18A.

It is also expected to invest more than US$100 billion over the next five years to increase production capacity in Arizona, New Mexico, Ohio and Oregon, creating nearly 10,000 manufacturing jobs.

US said to weigh sanctions against Huawei’s secretive chip supply network

US Commerce Secretary Gina Raimondo described the funding for Intel as a “massive step towards ensuring America’s leadership in manufacturing for the 21st century”.

The Taipei-based Taiwan Semiconductor Manufacturing Company (TSMC), an Intel competitor, is also building two facilities in the US with investments worth US$40 billion. It too hopes to receive funding from Washington.

Pat Gelsinger, Intel’s CEO, said on Wednesday that the federal support would ensure that “Intel and the US stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future”.



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