Intel Secures $11 Billion in Federal Funding as U.S. Races to Boost Chip Production

Domestic Semiconductor Manufacturing

The U.S. government has finalized nearly $11 billion in grants for Intel Corporation to expand its domestic semiconductor production under the CHIPS and Science Act. The funding includes $7.86 billion to bolster Intel’s core manufacturing facilities and an additional $3 billion announced earlier for defense-related projects. This marks a significant step in the Biden administration’s efforts to reduce dependence on foreign chipmakers and address national security concerns.

Passed in 2022 with bipartisan support, the CHIPS Act allocates $52 billion in direct grants and additional tax incentives to encourage tech companies to build chip factories in the U.S. The initiative gained urgency as geopolitical tensions with China heightened fears of supply chain disruptions. “The CHIPS for America program will supercharge American technology and innovation,” said Commerce Secretary Gina Raimondo, emphasizing Intel’s pivotal role in revitalizing the U.S. semiconductor industry.

Intel’s Strategic Investments Amid Challenges

Intel plans to invest $90 billion in U.S. chip production by the end of the decade, upgrading facilities in Arizona, Oregon, Ohio, and New Mexico. Despite this significant backing, the $7.86 billion grant is slightly lower than the $8.5 billion initially pledged. The adjustment followed Intel’s announcement of 15,000 layoffs after reporting a $1.6 billion quarterly loss.

The urgency to allocate CHIPS Act funds comes as political transitions loom. Former President Donald Trump, a vocal critic of the Act, argued for high tariffs on imported chips to incentivize domestic production. Meanwhile, Intel’s expansion aligns with broader efforts to secure critical supply chains, as competitors like Taiwan Semiconductor Manufacturing Company (TSMC) also receive substantial U.S. grants.

The race to rebuild the domestic chip industry reflects a broader push for technological self-reliance, with Intel positioned as a cornerstone of America’s semiconductor future.