Intel Gets $19.5 Billion in Federal Funding and Loads of Tax Credits To Bolster Its Planned $100 Billion Spending Spree in the US

Please note that this is not intended as investment advice. The author does not hold any positions in the stocks mentioned.

Since its enactment in 2022, the CHIPS and Science Act – a major reform implemented by the Biden Administration that allocated $280 billion in new funding to enhance the technological position of the US, including $52.7 billion to strengthen the research and production of semiconductors –

As stated in the press release from the US Commerce Department, Intel has entered into a non-binding preliminary agreement to receive federal grants of up to $8.5 billion and loans of up to $11 billion through the CHIPS Act.

Furthermore, the chipmaker intends to utilize the U.S. Treasury Department’s Investment Tax Credit (ITC) of up to 25 percent for its projected investments of approximately $100 billion in the United States to establish:

A fab in Arizona
An advanced packaging center in New Mexico
A leading-edge manufacturing site in Ohio
An R&D center in Oregon

It should be noted that Intel’s plans for Columbus, Ohio involve creating “the biggest AI chip production facility globally”by 2027, according to statements made by the company’s CEO, Pat Gelsinger, on Twitter.

It is undeniable that Intel had requested for more than $10 billion in funds from the Biden Administration. Gelsinger has publicly stated that the company should receive a greater portion of the CHIPS Act funds as they took a risk by aligning with the US in its efforts to gain complete control over the semiconductor industry.

Intel had actually been delaying its intended investments in the United States in order to pressure the Biden Administration into meeting its demands.