Financing for Intel Intel is allowed to borrow up to 20 billion US dollars from the government

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The US Department of Commerce proposes direct financing to Intel through the CHIPS and Science Act and, in addition, the company could also qualify for loans. Intel could secure nearly 20 billion US dollars for investments in domestic semiconductor production. In any case, Intel plans to invest up to 100 billion US dollars over the next five years.

The goal of the US government under Joe Biden is clearly stated: They do not want to be left behind by Asian and other market leaders anymore and aim to implement a resilient semiconductor manufacturing chain in their own country.

Recently, US Commerce Secretary Gina Raimondo reaffirmed the states' plan to establish and boost IC production within the next five years (by 2030) and to supply around 20 percent of the market - a goal that the EU has also set for itself, by the way.

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The plans of the US government, namely the establishment of the entire value chain for advanced logic chips in its own country, from polysilicon production to wafer manufacturing to advanced packaging, are to be enabled by billions in subsidies and support for domestic players. One of these domestic players is Intel, and the executives of this corporation had positive news to report on March 20, 2024.

Up to 20 billion US dollars in support from the country

Intel and the US Department of Commerce have signed a non-binding letter of intent that enables direct funding of up to 8.5 billion USD for Intel's commercial semiconductor projects under the CHIPS and Science Act. With this money, the executives at Intel would like to advance their commercial semiconductor projects in the states of Arizona, New Mexico, Ohio, and Oregon.

Furthermore, Intel expects a tax credit from the US Department of the Treasury (Investment Tax Credit, ITC) of up to 25 percent for qualified investments of more than 100 billion USD, as well as the possibility to obtain up to an additional 11 billion USD through a federal loan. The people at Intel naturally intend to use the money wisely. Over the next five years, the company plans to spend up to 100 billion USD to expand the capacities and capabilities of the US chip industry, which are crucial for economic and national security and for accelerating new technologies.

"Today is a decisive moment for the USA and Intel as we work to advance the next great chapter of American semiconductor innovation," said Intel CEO Pat Gelsinger during the event. "AI is driving the digital revolution, and everything digital needs semiconductors. The support from the CHIPS Act will help ensure that Intel and the USA remain at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to secure the future of our country."

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The CHIPS future of the USA

The subsidies and financing from the US government that flow into selected companies in its own country naturally bring not only technical and economic progress in the long term but are also of interest with regard to the upcoming US presidential elections. In early November 2024, elections will be held again, and the Biden-Harris administration can claim, for the already ongoing election campaign, that the funds from the CHIPS and Science Act are creating job prospects for tens of thousands.

Through direct investments in the semiconductor value chain, Intel expects to enable up to 30,000 new jobs; 10,000 within the company itself, and 20,000 in the construction industry. Additionally, the officials anticipate that another 50,000 jobs will be indirectly created, namely among suppliers.

"With this agreement, we are helping to create incentives for Intel investments of over 100 billion US dollars. This is one of the largest investments ever made in the US semiconductor industry, generating over 30,000 well-paid jobs and stimulating the next generation of innovations," said US Commerce Secretary Gina Raimondo.

"This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the top chips we need to secure our economic and national security are made in the USA." (sb)

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