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Monday, July 15, 2024

Intel and Biden Admin Team Up for Chip Funding

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Intel invests $100 billion in US chip factories with support from the Biden administration’s $8.5 billion funding and the CHIPS Act. This will create 30,000 jobs and strengthen US chip production.

In addition to being eligible for federal loans up to $11 billion and an Investment Tax Credit (ITC) of up to 25% on investments over $100 billion, Intel anticipates other benefits from the United States Treasury Department. More than 50,000 indirect jobs with suppliers and other sectors will be supported by Intel’s investments, which are anticipated to generate over 10,000 direct jobs for the firm and approximately 20,000 direct jobs for construction. All three of Intel’s primary goals—leading in process technology, strengthening the worldwide semiconductor supply chain, and developing a first-rate foundry business—align with the CHIPS Act’s goals, which seeks to elevate American semiconductor production and technological prowess.

Customers can access all the essential tools they need to create chips for the next generation of AI-powered computers through Intel Foundry, which unites Intel’s Technology Development, Global Manufacturing and Supply Chain, customer service, and ecosystem operations. Intel Foundry assists customers in being prepared for Intel process and packaging designs by providing full-stack optimization across the factory network and software. Intel Foundry is the first systems foundry for the AI era, and its ecosystem partners offer extensive support for electronic design automation and intellectual property.

Intel is committed to supporting the United States’ efforts to reclaim its leadership position in this crucial industry through its investments to improve chipmaking capabilities and capacity. Intel’s investments in the Silicon Desert (Arizona), Silicon Mesa (New Mexico), Silicon Heartland (Ohio), and Silicon Forest (Oregon) would be supported by the proposed CHIPS Act funds.

Putting Money into American Chip Factories

According to a recent agreement, computer chip factories in Arizona, Ohio, New Mexico, and Oregon will receive up to $8.5 billion in direct financing and $11 billion in loans from the Biden administration. According to Intel, a total of thirty thousand manufacturing and construction jobs will be created thanks to the new funding and other initiatives.

Wednesday, President Joe Biden will visit Intel’s site in Chandler, Arizona, which might be a pivotal swing state in November’s election. During his visit, Biden intends to tout the investment. He frequently claims that his economic plans are unknown to the voting public, implying that more people would back him if they were informed.

To lessen the United States’ reliance on foreign chip manufacturers, the bipartisan CHIPS and Science measure, which Biden signed into law in 2022, will provide the financing. The measure aims to invest $200 billion in the domestic production of semiconductor computer chips.

The Announcement of Funding

According to Gina Raimondo, secretary of Commerce, the United States will be able to create 20% of the world’s most advanced chips by 2030, up from zero now, according to the agreement her department negotiated. A national security and economic concern has arisen from the United States’ incapacity to manufacture its advanced chips, even though it designs them.

The announcement of funding is made amid the intense presidential campaign of 2024. An upturn in American manufacturing and an increase in employment are two outcomes of Biden’s policy, he has been assuring voters. He is aiming at the presumptive Republican nominee, former President Donald Trump, with his speech. Trump wants to raise tariffs again on the pretense of safeguarding U.S. factory jobs from China, just like he did while in office.

The Biden administration’s financing, along with Intel’s previously stated intentions to invest over $100 billion in the US over five years, will result in the creation of 10,000 jobs within the company and around 20,000 employment in construction, according to the corporation. The financing is anticipated to indirectly support over 50,000 employees with suppliers and other companies.

What are the Stats?

In 2020, Biden fell just short of Trump in Arizona, with a margin of 49.4 percent to 49.1 percent. Only 34% of American people are happy with Biden’s economic leadership, according to a poll conducted in February by the Associated Press-NORC Center for Public Affairs. The Democrat, who enjoyed 52% approval on the economy in July 2021, has been hammered hard by the lasting effects of inflation reaching a four-decade high in 2022.

Concerned that the United States economy may enter a recession if it lost access to Asian-made chips following the epidemic, the Biden administration assisted in getting the CHIPS Act passed by Congress. Proponents of the investment in Taiwanese technology voiced their concern about Chinese influence on the island nation, noting that 90% of the world’s advanced computer chips come from Taiwan. According to officials in the Biden administration, government assistance is necessary for computer chip companies to invest domestically at the anticipated size. Furthermore, Intel intends to utilize the Treasury Department’s tax credits, which can amount to up to 25%, on eligible investments. The Santa Clara, California-based firm plans to spend the capital across four states. The funds will be used to construct two additional chip facilities and upgrade an existing one in Chandler, Arizona. Two cutting-edge facilities will be set up in New Albany, Ohio, a town located outside of Columbus, the state capital, thanks to the financing mentioned above.

Two of the company’s Rio Rancho, New Mexico facilities will also be converted into state-of-the-art packaging centers. Intel will also update its Hillsboro, Oregon, facility. The Biden administration has prioritized workforce training and affordable child care in their agreements to support businesses. Intel will enhance the amount it reimburses for its child care program and commit to local training programs as part of the agreement with the Commerce Department.

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