U.S. Pledges $7.86 Billion CHIPS Act Subsidy to Intel

On November 26, Intel Corporation and the U.S. Department of Commerce announced a landmark agreement under the CHIPS and Science Act. The Department of Commerce will provide Intel with up to $7.86 billion in direct subsidies to support its commercial semiconductor manufacturing projects in the United States.

The funding will be used to construct two cutting-edge logic fabs in Arizona, upgrade two advanced packaging facilities in New Mexico, and invest in a leading-edge technology development center in Oregon. These initiatives align with Intel's commitment to bolstering U.S.-based chip manufacturing and maintaining leadership in semiconductor innovation.

Since the CHIPS and Science Act was enacted over two years ago, Intel has announced plans to invest over $100 billion in expanding domestic semiconductor manufacturing and advanced packaging capabilities. These historic investments aim to create tens of thousands of jobs, enhance supply chain resilience, strengthen U.S. research and development, and secure America's position at the forefront of advanced semiconductor technology.

Intel also plans to apply for investment tax credits from the U.S. Treasury, which could cover 25% of more than $100 billion in qualifying investments.

The finalized agreement follows the earlier signing of a memorandum of understanding, a thorough due diligence process by the Department of Commerce, and announcements regarding investment tax credits. Notably, the direct subsidy amount was adjusted from an initial $8.5 billion to $7.86 billion to allocate $3 billion from CHIPS Act funds for the Secure Enclave program, as mandated by Congress.

In September 2024, Intel secured a $3 billion manufacturing contract under the Secure Enclave program. This initiative aims to expand trusted semiconductor production for the U.S. government and solidify Intel's partnership with the Department of Defense through advanced microelectronics programs like RAMP-C and SHIP.

Intel CEO Pat Gelsinger highlighted the company's progress: “Intel 3 is now in high-volume production, and Intel 18A will follow next year. Advanced semiconductors will once again be manufactured in the U.S. Bipartisan support for restoring America's leadership in technology and manufacturing is driving historic investments critical to long-term economic growth and national security. Intel is committed to advancing these priorities and expanding our U.S. operations in the coming years.”

A significant milestone for Intel includes the installation of the industry's first commercial High Numerical Aperture Extreme Ultraviolet (High NA EUV) lithography machine. Additionally, Intel completed the installation of another High NA EUV tool at its R&D facility in Hillsboro, Oregon. These state-of-the-art tools will enable Intel to advance next-generation chip manufacturing technologies and maintain its leadership in the semiconductor sector.