U.S. Commerce Department announces agreement with Intel on semiconductor investment

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On Wednesday, the U.S. Department of Commerce announced it had reached a non-binding preliminary agreement with Intel Corporation to provide up to $8.5 billion in funding to strengthen the U.S. supply chain for semiconductor manufacturing.

According to the agreement, the direct funding from the CHIPS and Science Act would help re-establish America as a leader in semi-conductor manufacturing and would create tens of thousands of jobs. The funding will support multiple projects in Arizona, New Mexico, Ohio and Oregon, officials said.

“Today’s announcement is a massive step towards ensuring America’s leadership in manufacturing for the 21st century. With this agreement, we are helping to incentivize over $100 billion in investments from Intel – marking one of the largest investments ever in U.S. semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation,” U.S. Secretary of Commerce Gina Raimondo said. “This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the U.S.”

The proposed investment would support the construction of two new leading-edge logic fabs and the modernization of one existing fab, in Chandler, AZ; the modernization of two fabs into advanced packaging facilities in Rio Rancho, NM, turning it into the larges advanced packaging facility in the U.S.; the creation of a new regional chipmaking ecosystem, anchored by two leading-edge logic fabs in New Albany, OH; and investment in the expansion and modernization of technology development facilities in Hillsboro, OR.

Over the course of the next five years, Intel expects its investments in the United States to exceed $100 billion. When added to the Biden Administration’s proposed CHIPS funding, the investment would mark one of the largest investments ever announced in U.S. semiconductor manufacturing.