This week, the White House and Intel announced a PMT or “preliminary memorandum of terms” for CHIPS Act funding. This deal is set to provide Intel with multi-billion dollar packages to develop new semiconductor manufacturing capabilities in the US. Pat Gelsinger, in conjunction with U.S. Secretary of Commerce Gina Raimondo hinted at the approval of this award at the Intel Foundry 2024 event. After a few weeks, some details about this deal have been provided.
Intel Receives Massive Funding from CHIPS Act
Beyond receiving billions in direct funding from the CHIPS Act, Intel will obtain more behind the award. The key points include:
- A direct funding of $8.5B
- Qualification for up to 25% from a U.S. Treasury Department Investment Tax Credit (ITC) on over $100B in qualified investments
- Eligibility for up to $11B in federal loans with low interest
Collectively, we can infer that the stated package, which is estimated to be worth several tens of billion dollars, provides significant benefits to Intel in the upcoming years. Conventionally, awards and investments are calculated cumulatively over time, typically a five-year span, to amplify the figures.
Nonetheless, the enormity of the funding becomes apparent when compared to the authorized funding of approximately $280B under the CHIPS Act, aimed at stimulating the domestic production of U.S chips. From this figure, a mere $52.7B has been allocated. Furthermore, $13B has been designated to facilitate semiconductor research, training, and an estimated $174B for the public sector’s scientific and technological research. Organizations like the Department of Energy and NASA are the beneficiaries of this large sum.
A Closing Thought
Intel has disclosed plans to utilize the funds to enhance and extend its chipmaking and packaging abilities across centers located in Arizona, New Mexico, Ohio, and Oregon. The press briefing is scheduled to occur just a short while after STH in Arizona. Coinciding with the election year, Arizona, New Mexico, and Oregon sided with Biden in the 2020 election, with Arizona transitioning from being a traditionally Republican to a Democratic state. Predictions reveal that the funding will likely result in the creation of approximately 10,000 jobs at Intel and an additional 20,000 jobs in the construction sector, as announced by Intel and the White House.
It might seem odd, but considering that Intel 18A is still a couple of quarters away from large-scale production, the funding from the CHIPS Act could be considered as Pat Gelsinger’s most significant accomplishment as Intel’s CEO to date. This provides Intel with substantial financial support to construct fabs and enhance domestic semiconductor production.
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