Intel is re establishing its leadership position in the chip industry in the United States, aiming to compete with companies such as TSMC and Samsung.
The US Department of Commerce announced on Wednesday (March 20) that as the Biden administration intensifies efforts to transfer semiconductor manufacturing to the US mainland, the US government has reached a preliminary non binding memorandum of terms with Intel.
Intel will receive up to $8.5 billion in subsidies through the US Chip and Science Act. In addition, Intel can also obtain an additional $11 billion in loans from the Chip Act.
President Biden visited Intel's factory in Chandler, Arizona on Wednesday and announced the funding incentive measures there. Subsequently, the White House website published relevant press releases. The press release stated that these funds will support Intel's factory construction and expansion in Arizona, Ohio, New Mexico, and Oregon, creating nearly 30000 jobs and supporting tens of thousands of indirect jobs.
According to a press release, since Biden took office, technology companies have announced investments of over $240 billion in the US to develop the chip industry, and work in the semiconductor industry is returning. With the support of these projects, the United States will produce approximately 20% of the world's cutting-edge chips by 2030.
Better competition
Secretary of Commerce Gina Raimondo said that this funding will help cutting-edge semiconductors manufactured in the United States maintain its leading position in innovation.
For a long time, Intel has been a backbone of the US semiconductor industry, developing chips that power many personal computers and data center servers worldwide. However, the company's revenue has been surpassed by Nvidia, a leading player in the field of artificial intelligence chips, and its market value has also been surpassed by competitors AMD and Qualcomm.
Although Intel's performance has declined compared to its peers, its position in the industry remains unique as it operates chip foundries in addition to designing processors. And companies like AMD and Nvidia are all fabless semiconductor companies, which means they design chips and then send the chip files to chip foundries, such as TSMC, which then manufacture the chips.
The funding received by Intel this time means that it will be able to better compete with TSMC and Samsung. In recent years, TSMC has been leading the forefront of semiconductor manufacturing, with almost all of the world's most advanced processors being manufactured by TSMC.
Intel stated that it will use the funds from the Chip Act for wafer fabs and research centers in Arizona, Ohio, New Mexico, and Oregon, with a total investment of up to $100 billion.
Among them, Intel's new wafer plant in Ohio will cost over $20 billion and is expected to start production in 2027 or 2028. Intel CEO Pat Gelsinger said that the Ohio factory will produce artificial intelligence chips for Intel and may also produce artificial intelligence chips for other semiconductor companies.
At the same time, Intel also plans to expand its chip production business in Arizona and New Mexico. The Arizona project involves the construction of two new wafer fabs and the upgrading and renovation of one existing wafer fab.
In addition to Intel, according to the Semiconductor Industry Association, GlobalFoundries, Microchip, and BAE Systems have received funding for the Chip Act. TSMC is also expected to receive funding from the US Chip Act to establish a factory in Arizona to produce chips required for Apple and AMD.