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US Commerce: $20B Subsidy for Intel

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US Commerce: $20B Subsidy for Intel

On March 20th, the U.S. Department of Commerce announced a substantial boost for Intel Corporation in the form of $8.5 billion in grant subsidies and up to $11 billion in loans. This financial assistance aims to support the expansion of Intel's semiconductor factories, marking the largest funding received under the U.S.'s plan to revitalize the domestic chip industry.

According to the U.S. Department of Commerce on Wednesday, this initiative will bolster Intel's investment of over $100 billion in the United States. It will primarily focus on efforts to produce cutting-edge semiconductors at large-scale facilities in Arizona and Ohio. Additionally, funds will be allocated for equipment development and advanced packaging projects in facilities located in Oregon and New Mexico.

Moreover, Intel is set to benefit from investment tax credits from the Treasury Department, potentially covering up to 25% of capital expenditures.

These subsidies stem from the 2022 Chips and Science Act, which earmarks $39 billion in appropriations alongside $750 billion in loans and guarantees. Its objective is to incentivize chip companies to establish manufacturing plants in the United States, aiming to reverse the decades-long trend of semiconductor production shifting to Asia.

Gina Raimondo, the U.S. Secretary of Commerce, emphasized that the U.S. aims to produce one-fifth of the world's advanced logic chips by the end of the century, with Intel's investment being a crucial component of this goal.

Intel CEO, Gelsinger, has been striving to restore Intel's technological prowess, particularly as the company has fallen behind its Asian competitors such as TSMC and Samsung Electronics in recent years.

Prior to this announcement, the U.S. had already unveiled three grant initiatives. These included a $35 million subsidy for BAE Systems to produce combat aircraft chips with a focus on national security, a plan to provide $162 million to Microchip Technology to bolster manufacturing capabilities for mature process chips like MCUs in the United States, and a $1.5 billion grant to GlobalFoundries to kickstart a new project expanding semiconductor production.


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