Intel Ohio investment hits $28B, fueled by incentives
$19.5B from CHIPS Act buoys semiconductors
President Biden’s recent announcement that Intel will receive $8.5 billion in grants and another $11 billion in loans from the CHIPS Act is the latest batch of incentives that the semiconductor company is getting to power its more than $100 billion spending spree across the country.
Here’s a look at the tax incentives that Intel is receiving since it released details two years ago of its plan to build two factories in Licking County. Intel now says that investment is worth $28 billion, up from $20 billion before.
Federal CHIPS incentives
Under the CHIPS and Science Act, the Commerce Department is awarding $8.5 billion in grants to Intel and providing low-cost loans of as much as $11 billion to the company.
The legislation also provides Intel and other semiconductor companies with a 25% investment tax credit that CEO Pat Gelsinger says could be worth an estimated $25 billion given the more than $100 billion that Intel expects to spend over the next several years at its four U.S. campuses.
The federal government would not say exactly how much of the incentive package will go to Intel’s project in Licking County, but state officials say it’s in the billions of dollars.
Ohio subsidies
The state government is providing incentives in three chunks: a $600 million “reshoring” grant that reflects the higher cost of building these factories in America; $691 million in infrastructure improvements; and $650 million over 30 years in state income tax incentives based on the number of workers Intel hires.
The infrastructure improvements include $300 million to be spent on a water reclamation facility, $290 million on road work and $101.2 million to build out water and wastewater capacity. The plants will use 5 million gallons of water per day, water that Intel recycles.
Additionally, Jobsohio, the state’s economic development arm, has provided $150 million to Intel.
Intel spent $111 million of that money to buy the 750 acres of land where it is building the two factories. It also received a $25 million grant from Jobsohio for workforce development.
New Albany incentives
New Albany has given Intel a 30year, 100% property tax abatement on the buildings that Intel constructs in the city’s business park.
The value of the property tax abatement will depend on the value of the buildings that Intel constructs on the site in the city’s business park.
The abatement is consistent with what New Albany has offered to other companies that have located in the park the past 12 years. The difference is that the abatement will remain in effect for 30 years.
New Albany shares income tax revenue from workers at the park with local schools and communities to make up for some of the property tax abatement. mawilliams@dispatch.com @Bizmarkwilliams