Intel will receive $8.5bn in direct funding and $11bn in loans from the US government to expand its capacity to make high-end chips, as it seeks to reinvent itself as a national champion in the sector and compete with the likes of Taiwan’s TSMC and South Korea’s Samsung. US President Joe Biden will travel to Intel’s site in Chandler, Arizona, on Wednesday to announce the package, which will go towards building new facilities for the company in the south-western state, as well as in Ohio, New Mexico and Oregon. Biden’s intervention in Arizona — one of a handful of swing states that will decide the US presidential election pitting him against Donald Trump — comes as the Democratic president is trying to boost his languishing approval ratings on the economy. The government funding for chip manufacturing, which was passed by Congress in 2022, is part of Biden’s sweeping agenda to revitalise domestic manufacturing in areas ranging from clean energy to semiconductors and steel. At an event in Reno, Nevada, on Tuesday, Biden sought to emphasise his economic achievements, contrasting them with his predecessor’s, saying he had created millions of jobs while Trump had passed a large tax cut for the wealthy and wants “to undo everything we’ve done”. Intel has already committed to investing $100bn in chip manufacturing over the next five years. It had said it expected to further benefit from US Treasury tax credits that would allow it to write off up to 25 per cent of that investment. The $8.5bn will be distributed in tranches, subject to Intel reaching certain “milestones”, senior White House officials said. They expect the funding to lead to 30,000 jobs in the chip sector. The officials said the funds for Intel should start to arrive later this year once the agreement is finalised. In total, it is likely to constitute the largest such grant made under the 2022 Chips and Science Act, which provided for $52bn in subsidies to help shift semiconductor manufacturing back to the US amid geopolitical tensions with China.
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