INTEL CLINCHES NEARLY $20 BILLION IN AWARDS FROM BIDEN TO BOOST US CHIP OUTPUT

WASHINGTON, March 20 (Reuters) – The Biden administration said it is awarding Intel (INTC.O), nearly $20 billion in grants and loans on Wednesday, supercharging the company’s domestic semiconductor chip output and marking the government’s largest outlay to subsidize leading-edge chip production.

Biden will announce the preliminary agreement for $8.5 billion in grants and up to $11 billion in loans for Intel in Arizona, with some of the funding to be used to build two new factories and modernize an existing one.

Commerce Department Secretary Gina Raimondo called it a “huge deal” and one of the largest investments ever in U.S. semiconductor manufacturing.

“It means leading-edge semiconductors made in the United States of America,” she said on Tuesday, noting that the country’s share of leading-edge chip production is now at zero but may rise to 20% by 2030 thanks in part to the subsidy program.

The goal is to reduce reliance on China and Taiwan, as the share of global semiconductor manufacturing capacity in the U.S. has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.

Reuters first reported news of the trip to Arizona, a critical political swing state that Biden, who narrowly won the state in 2020, hopes to win in November in his matchup against Republican former President Donald Trump.

The historic outlay shows the Biden administration is betting big on Intel as part of the 2022 CHIPS and Science Act, a bid to boost domestic semiconductor output with $52.7 billion in funding, including $39 billion in subsidies for semiconductor production and $11 billion for research and development.

Source: Reuters