By JOSH BOAK (Associated Press)
WASHINGTON (AP) — The Biden administration has agreed to give Intel up to $8.5 billion directly and $11 billion in loans for computer chip plants in four states. The government says this financial boost will help the U.S. increase its global share of advanced chip production from zero to 20%.
President Joe Biden is set to highlight the investment when he visits Intel's Ocotillo campus in Chandler, Arizona, which could be a crucial swing state in November's election. Biden has often mentioned that not enough voters are aware of his economic policies and has suggested that more people would support him if they were.
Commerce Secretary Gina Raimondo stated that the deal made through her department would put the United States in a position to produce 20% of the world's most advanced chips by 2030, with Intel investing in facilities in Arizona, Ohio, Oregon, and New Mexico. While the United States designs advanced chips, its inability to produce them domestically has become a national security and economic risk.
“Failure is not an option — leading-edge chips are the core of our innovation system, especially when it comes to advances in artificial intelligence and our military systems,” Raimondo said in a call with reporters. “We can’t just design chips. We have to make them in America.”
The funding announcement comes during the 2024 presidential campaign. Biden has been telling voters that his policies have led to a resurgence in U.S. manufacturing and job growth. This message directly challenges former President Donald Trump, the presumptive Republican nominee, who raised tariffs during his time in the White House and wants to do so again in order to protect U.S. factory jobs from China.
Biden narrowly defeated Trump in Arizona in 2020 with a margin of 49.4% to 49.1%.
U.S. adults have negative opinions about Biden's economic leadership, with only 34% approving, as per a February poll by The Associated Press-NORC Center for Public Affairs. The lingering impact of inflation reaching a four-decade high in 2022 has affected the Democrat, who had a 52% approval on the economy in July 2021.
Intel’s projects would be funded in part through the bipartisan 2022 CHIPS and Science Act, which the Biden administration helped guide through Congress during concerns after the pandemic that the loss of access to chips made in Asia could plunge the U.S. economy into recession.
When advocating for the investment, lawmakers expressed worry about China's attempts to control Taiwan, which contributes to over 90% of advanced computer chip production.
Ohio Sen. Sherrod Brown, a Democrat up for reelection this year, emphasized that his state would become “a global leader in semiconductor manufacturing” as Intel would be creating thousands of jobs. Ohio has supported Trump in the last two presidential elections, and Brown will face Republican Bernie Moreno, a Trump-backed businessman from Cleveland, in November.
Wednesday’s announcement is the fourth and largest so far under the chips law, with the government support expected to assist Intel Corp. in making $100 billion in capital investments over five years. About 25% of that total would involve constructing buildings and land, while roughly 70% would be allocated to equipment, said Pat Gelsinger, CEO of Intel.
“We consider this a defining moment for the United States, the semiconductor industry and for Intel,” stated Gelsinger, who referred to the CHIPS Act as “the most crucial industrial policy legislation since World War II.”
The Intel CEO mentioned in a call with reporters that he would like to see a follow-up to the 2022 law to provide additional funding for the industry.
Biden administration officials state that computer chip companies would not be investing domestically at their expected scale without the government support. Intel funding would result in a combined 30,000 manufacturing and construction jobs. The company also plans to claim tax credits from the Treasury Department worth up to 25% on qualified investments.
The Santa Clara, California-based company will use the funding in four different states. In Chandler, Arizona, the money will help to construct two new chip plants and upgrade an existing one. The funding will establish two advanced plants in New Albany, Ohio, which is just outside the state capital of Columbus.
The company will also convert two of its facilities in Rio Rancho, New Mexico, into advanced packaging facilities. And Intel will also modernize facilities in Hillsboro, Oregon.
The Biden administration has also made workforce training and access to affordable child care a priority in agreements to support companies. Under the agreement with the Commerce Department, Intel will commit to local training programs as well as increase the reimbursement amount for its child care program, among other efforts.
