WASHINGTON — The Biden administration has reached an agreement to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants in four states, including the factories currently under construction in New Albany, Ohio.
U.S. Sen. Sherrod Brown (D-OH) announced the investment early Wednesday morning.
“This investment is vital to completing the Intel project, and it’s why we wrote the CHIPS Act – to make Ohio a global leader in semiconductor manufacturing. Today’s announcement is a major step forward in our work to create thousands of good-paying jobs, strengthen our supply chains, and bring manufacturing of this crucial technology back where it belongs: Ohio,” said Brown in a statement. “I’ll keep fighting to ensure that Ohio workers lead the world in producing the technologies of the future.”
President Joe Biden plans to talk up the investment on Wednesday as he visits Intel's Ocotillo campus in Chandler, Arizona, which could be a decisive swing state in November’s election. The Democratic president has often said that not enough voters know about his economic policies and suggested that more would support him if they did know.
Commerce Secretary Gina Raimondo said the deal reached through her department would put the United States in a position to produce 20% of the world's most advanced chips by 2030 with Intel investing in facilities in Arizona, Ohio, Oregon and New Mexico. The United States designs advanced chips, but its inability to make them domestically has emerged as a national security and economic risk.
“Failure is not an option — leading-edge chips are the core of our innovation system, especially when it comes to advances in artificial intelligence and our military systems,” Raimondo said on a call with reporters. “We can’t just design chips. We have to make them in America.”
The funding announcement comes amid the heat of the 2024 presidential campaign. Biden has been telling voters that his policies have led to a resurgence in U.S. manufacturing and job growth. His message is a direct challenge to former President Donald Trump, the presumptive Republican nominee, who raised tariffs while in the White House and wants to do so again on the promise of protecting U.S. factory jobs from China.
Biden narrowly beat Trump in Arizona in 2020 by a margin of 49.4% to 49.1%. Ohio has voted for Trump in the past two presidential elections, and Brown in November will face Republican Bernie Moreno, a Trump-backed businessman from Cleveland.
U.S. adults have dim views of Biden's economic leadership, with just 34% approving, according to a February poll by The Associated Press-NORC Center for Public Affairs. The lingering impact of inflation hitting a four-decade high in 2022 has hurt the Democrat, who had a 52% approval on the economy in July 2021.
Intel's projects would be funded in part through the bipartisan 2022 CHIPS and Science Act, which the Biden administration helped shepherd through Congress at a time of concerns after the pandemic that the loss of access to chips made in Asia could plunge the U.S. economy into recession.
When pushing for the investment, lawmakers expressed concern about efforts by China to control Taiwan, which accounts for more than 90% of advanced computer chip production.
Wednesday's announcement is the fourth and largest so far under the chips law, with the government support expected to help enable Intel Corp. to make $100 billion in capital investments over five years. About 25% of that total would involve building and land, while roughly 70% would go to equipment, said Pat Gelsinger, CEO of Intel.
“We think of this as a defining moment for the United States, the semiconductor industry and for Intel,” said Gelsinger, who called the CHIPS Act “the most critical industrial policy legislation since World War II.”
The Intel CEO said on a call with reporters that he would like to see a sequel to the 2022 law in order to provide additional funding for the industry.
Biden administration officials say that computer chip companies would not be investing domestically at their expected scale without the government support. Intel funding would lead to a combined 30,000 manufacturing and construction jobs. The company also plans to claim tax credits from the Treasury Department worth up to 25% on qualified investments.
The Santa Clara, California-based company will use the funding in four different states. In Chandler, Arizona, the money will help to build two new chip plants and modernize an existing one. The funding will establish two advanced plants in New Albany, Ohio, which is just outside the state capital of Columbus.
According to Ohio Gov. Mike DeWine, Intel is investing more than $28 billion for the New Albany factories, creating 3,000 full-time jobs and more than 7,000 construction jobs. The facilities were initially slated to open next year, but Intel has pushed the timeline back to 2026.
“Intel’s commitment to building semiconductor chips in Ohio is adding tens of thousands of new direct and indirect jobs right here in Ohio - the heart of the Silicon Heartland," added DeWine in a statement. "Today’s announcement is proof that the CHIPS Act is paying dividends for Ohioans. Semiconductor chips are the building blocks that power today’s economy, and it is imperative that we produce chips on American soil in order to strengthen our national security and help fuel economic growth.”
The company will also turn two of its plants in Rio Rancho, New Mexico, into advanced packaging facilities. And Intel will also modernize facilities in Hillsboro, Oregon.
The Biden administration has also made workforce training and access to affordable child care a priority in agreements to support companies. Under the agreement with the Commerce Department, Intel will commit to local training programs as well as increase the reimbursement amount for its child care program, among other efforts.
Previous Reporting:
- Spectators gather to watch as 'super load' travels through central Ohio Friday
- Intel announces delay on construction timeline of Licking County manufacturing facilities
- House passes CHIPS Act, paves the way for Intel's move into Ohio
- Ohio Gov. Mike DeWine announces Intel's $20 billion investment, bringing 20,000 jobs to the state