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Intel Gets $8.5 Billion Award From U.S Chips Act

The U.S. government is granting Intel up to $8.5 billion to help fund new chip plants in four states, the largest award yet in an effort to revive American chip-making overseen by the Biden administration.

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A government grant is the largest yet to come from the $53 billion Chips Act

The money will go toward new factories and expansion projects in Arizona, New Mexico, Ohio and Oregon, the Commerce Department said. Intel’s total investment in U.S. projects in the next five years is expected to exceed $100 billion, according to the department, which is overseeing the grants.

The grant money, set aside under 2022’s Chips Act, aims to fund a resurgence of U.S. manufacturing to counteract Covid-era supply-chain disruptions and address growing geopolitical tensions with China.

Much of the world’s chip production has shifted to Asia in recent decades, leaving the U.S. with around 12% of the world’s manufacturing in 2020.

The Chips Act is part of President Biden’s experiment with industrial policy, where taxpayer funds are used to bolster some companies that the administration views as important for national security. Biden aides have said that they hope the chip-industry investments, if successful, could serve as a template for how to prod other sectors.

Image: Intel