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The United States government has finalized a substantial near $11 billion grant for Intel Corporation aimed at bolstering the production of advanced semiconductors within American borders. This initiative comes as part of an urgent push by the Biden administration to allocate funds from the Chips and Science Act, particularly before the potential transition to a different presidential administration.

The financial package awarded to Intel includes $7.86 billion specifically dedicated to enhancing its core manufacturing capabilities, along with an additional $3 billion previously announced for collaborative projects with the Defense Department.

Established in 2022 and receiving broad bipartisan backing, the Chips and Science Act earmarks $52 billion for direct grants and substantial tax credits designed to encourage technology firms to establish semiconductor production facilities within the U.S. This move addresses national security concerns over America’s reliance on semiconductor suppliers based in Asia.

While the initial announcement in March projected $8.5 billion for Intel, the final figures have dropped slightly due to Intel’s recent decision to lay off 15,000 employees following a reported quarterly loss of $1.6 billion. Nevertheless, an Intel representative explained that the reduced grant reflects the company’s achievement of obtaining an additional $3 billion tied to its defense-related endeavors.

This substantial funding underscores Intel’s pivotal role in efforts to enhance domestic semiconductor manufacturing capabilities. Currently, most U.S. semiconductor firms, including tech giants such as Nvidia, outsource their chip production to manufacturers based overseas, particularly Taiwan Semiconductor Manufacturing Company (TSMC).

With rising geopolitical tensions involving China, there has been a consensus among many U.S. politicians emphasizing the importance of cultivating homegrown chip manufacturing to mitigate vulnerabilities to potential supply chain disruptions.

Commerce Secretary Gina Raimondo highlighted the expected impact of the CHIPS for America program, stating that it will invigorate American technological innovation and fortify national security, with Intel being a key player in revitalizing the domestic semiconductor industry.

Intel is projected to invest $90 billion of its own resources by the end of the decade into expanding chip production in several states, including Arizona, Oregon, Ohio, and New Mexico. This announcement from Intel follows shortly after the government secured a separate $6.6 billion grant for TSMC to enhance its facilities located in Arizona.

In light of ongoing concerns about U.S. dependence on offshore semiconductor production, former President Donald Trump has previously criticized the Chips and Science Act. During his recent campaign, he argued that the solution might lie in imposing higher tariffs on imported chips, contrasting with the billions provided to lure companies to establish operations domestically.


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