Intel Gets Almost $20 Billion In Awards From The US Government To Grow Its Chip Business!

As the world drives towards embracing smart technologies and the race to ace the artificial intelligence (AI) industry heats up, companies are trying their best to establish dominance in the semiconductor sector.

The sector plays a crucial role in the evolution of AI chips, GPUs, integrated circuits and other hardware essential for AI applications, smart technology, IoT devices and other technologies.

While AI market leader NVIDIA soars to new heights, its competitors are pushing hard by making some bold moves.

Among the competitors pushing to acquire more market share is Intel, which has come forth with some exciting news!

So, what did Intel reveal and how will it benefit the company, the semiconductor industry and society as a whole? Let’s explore!

What Did Intel Announce?

Through a news release, Intel revealed that the US Government announced it signed a non-binding preliminary memorandum of terms (PMT) that would see the company receive up to $8.5 billion in direct funding.
The grant is part of the CHIPS and Science Act, which aims to increase US semiconductor manufacturing and research and development capabilities, especially for leading-edge semiconductors.
As a result, this funding would be used to boost Intel’s commercial semiconductor projects, which adds to Intel’s proposed plan of investing over $100 billion in the country over the next five years.
Furthermore, Intel is seeking eligibility for federal loans up to $11 billion, taking the total amount of secured funding from grants and loans up to $19.5 billion.
Intel also expects to benefit from a US Treasury Department Investment Tax Credit (ITC) of up to 25% on more than $100 billion in qualified investments, i.e. around $25 billion.

How Does This Move Help The Company, The Semiconductor Industry And Society?

The proposed funding received from the US government would support Intel’s investment in four states across the country.
This includes Arizona, which is Intel’s US manufacturing powerhouse (Silicon Desert), New Mexico, Intel’s US advanced packaging (Silicon Mesa), Ohio, Intel’s new leading-edge manufacturing site (Silicon Heartland) and Oregon, the heart of Intel’s semiconductor R&D (Silicon Forest).
As per Intel’s news release, “Intel's strategy is centered on three core elements – establishing process technology leadership, building a more resilient and sustainable global semiconductor supply chain, and creating a world-class foundry business – all of which align with the objectives of the CHIPS Act to promote semiconductor manufacturing and technology leadership in the United States.”
While Intel currently employs almost 55,000 people in the US and indirectly supports more than 720,000 jobs in the country, the proposed plan is set to create over 10,000 new permanent jobs at the company, around 20,000 construction jobs and will indirectly support over 50,000 jobs with suppliers and supporting industries.

TechDogs-"An Image Of President Joe Biden And Pat Gelsinger, The CEO Of Intel"

Source

What Did Stakeholder Say?

Pat Gelsinger, the CEO of Intel, said, “Today is a defining moment for the U.S. and Intel as we work to power the next great chapter of American semiconductor innovation.”
[Contd.] “AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”
Gina Raimondo, US Secretary of Commerce, said, “Today’s announcement is a massive step towards ensuring America’s leadership in manufacturing for the 21st century. With this agreement, we are helping to incentivize over $100 billion in investments from Intel – marking one of the largest investments ever in U.S. semiconductor manufacturing, which will create over 30,000 good-paying jobs and ignite the next generation of innovation.”
[Contd.] “This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the U.S.”

Do you think this move will help Intel challenge its competitors and further its market share?

Let us know in the comments below!

First published on Thu, Mar 21, 2024

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Enterprise Solutions Semiconductors Microchips Expansion Intel Funding Grants Loans AI Artificial Intelligence

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