Daily Sabah (Turkey)

Intel granted nearly $20B to boost chip output

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administra­tion said yesterday it is awarding Intel nearly $20 billion in grants and loans, boosting the company’s domestic semiconduc­tor chip output and marking the government’s largest outlay to subsidize leadingedg­e chip production.

Biden was due to announce the preliminar­y agreement for $8.5 billion in grants and up to $11 billion in loans for Intel in Arizona. Some of the funding will 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.

Commerce is dedicating $28 billion to government subsidies for chip manufactur­ing – although it has more than $70 billion in requests – and also has $75 billion in lending authority.

The announceme­nt in Arizona could also help Democrats defend a critical U.S. Senate seat in the November elections and possibly boost a pair of competitiv­e House of Representa­tive races.

Arizona was a point of pride for Biden’s 2020 campaign, which flipped the southweste­rn state for the first time in six presidenti­al elections, but his aides see delivering a repeat victory as a tall order.

It is also welcome news for Intel, which in January forecasted first quarter revenue could miss market estimates by more than $2 billion. Intel is grappling with uncertain demand for its chips used in the traditiona­l server and personal computer markets.

Last month, the Biden administra­tion awarded $1.5 billion to GlobalFoun­dries, the world’s third-largest contract chipmaker, to build a semiconduc­tor production facility in Malta, New York, and expand existing operations there and in Burlington, Vermont.

In January, Commerce announced that Microchip Technology would receive $162 million in government grants, allowing the company to triple the production of mature-node semiconduc­tor chips and microcontr­oller units at two U.S. factories.

Awards for South Korea’s Samsung and Taiwan’s TSMC are expected in the coming weeks.

 ?? ?? The logo for the Intel Corporatio­n is seen on a sign outside a manufactur­ing site, Chandler, Arizona, U.S., Oct. 2, 2020.
The logo for the Intel Corporatio­n is seen on a sign outside a manufactur­ing site, Chandler, Arizona, U.S., Oct. 2, 2020.

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