Biden cuts $19.5B Intel deal for US chip plants

CHANDLER, Ariz. — The Biden administration has reached an agreement to provide Intel with up to $8.5 billion in funding and $11 billion in loans for computer chip plants in four states, a cash infusion the government says should help the U.S. boost its global share of advanced chip production from zero to 20%.

President Joe Biden talked up the investment Wednesday while visiting Intel’s Ocotillo campus in Arizona, which could be a decisive swing state in November’s election. Biden inspected silicon wafers and chips on the tour, telling employees, “You’re bringing the future back to America.”

Commerce Secretary Gina Raimondo said the deal reached through her department would put the nation in a position to produce 20% of the world’s most advanced chips by 2030 with Intel investing in sites in Arizona, New Mexico, Ohio and Oregon.

The U.S. designs advanced chips, but its inability to make them domestically has emerged as a national security and economic risk.

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 under the chips law, with the government support expected to help enable Intel Corp. to make $100 billion in capital investments over five years.