Key Takeaways
- Intel has received $7.86 billion through the CHIPS and Science Act as confirmed by the US Department of Commerce.
- This funding will directly fuel the semiconductor manufacturing projects that Intel has planned to launch in Arizona, New Mexico, Ohio, and Oregon.
- In addition to this funding, it also managed to secure a $3 billion award from the Department of Defense and a 25% investment tax credit from the U.S. Treasury Department.
- This will also add more than 20,000 construction jobs, 10,000 company jobs, and 50,000 indirect jobs.
Intel has finally managed to secure direct funding of up to $7.86 billion through the CHIPS and Science Act from the US Department of Commerce. This money will directly go to the company’s upcoming commercial semiconductor manufacturing projects in New Mexico, Ohio, Oregon, and Arizona.
Out of this, $65 million will be invested in workforce development. This will include a $56 million investment for education and training programs and a separate $5 million investment to increase the availability of childcare near Intel facilities.
In addition to this investment, the company has also managed to secure a 25% investment tax credit from the U.S. Treasury Department and a $3 billion deal from the Department of Defense.
All these investments will have significance for both the company and the country.
What’s In It For The Company?
It’s no secret that Intel has been struggling for a while. Increasing competition from AMD and Nvidia has been slowly eating away at its market value. In 2021, its market value was approximately $209.45 billion but in 2024 (as of November), its market value is only $102 billion.
In addition to that, the company recently revealed its third-quarter earnings where it faced a massive $16.6 billion loss. As a result, more than 2,000 jobs were cut which in turn affected share prices and made investors lose their faith in the company. It was a vicious cycle.
However, this new investment can completely change the picture for the company. In 2024, Intel promised to invest more than $100 billion in semiconductor manufacturing but it couldn’t have kept its promise without getting this funding.
Sure, Intel had already been making some significant progress in the semiconductor industry.
- For instance, Intel 3 is already in mass production and Intel 18A is expected to launch in 2025.
- It also managed to score a multiyear partnership with Amazon Web Services.
But all of these achievements together wouldn’t have been able to help Intel reach the position in the semiconductor industry that this massive funding can.
Thankfully, with this investment more than 10,000 company jobs, 20,000 construction jobs, and 50,000 indirect jobs.
Read More: Everything Intel Announced at Computex 2024: Xeon 6 Processors and Lunar Lake AI Chips
What’s In It For The US?
The US was gradually losing its hold over the global chipmaking market. Although Nvidia is one of its biggest players, in 2022, its contribution to the global chip manufacturing industry was only 10% and that too was expected to decrease.
On the other hand, China, one of the biggest rivals of the US, was making significant improvements in the industry.
Naturally, the US had to do something. So it introduced the CHIPS Act in 2024 as its first step to remedy the situation. It also helped by adding more jobs and opportunities. Also, the US’s global contribution to the chip market is now expected to grow (instead of decreasing) to 14% by 2032.
The CHIPS for America program will supercharge American technology and innovation and make our country more secure – and Intel is expected to play an important role in the revitalization of the U.S. semiconductor industry – Gina Raimondo, U.S. Secretary of Commerce
Right now, what the US needs more than anything is a face to drive its ambition. And it’s putting its bet on Intel to be that face.
The US firmly believes that Intel can help build a strong domestic manufacturing space for chips and position the country at the top of the global supply chain.
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