By Mackenzie Hawkins | Bloomberg
The US will award Intel Corp. $8.5 billion in grants and as much as $11 billion in loans to help fund an expansion of its semiconductor factories, marking the largest award from a program designed to reinvigorate the domestic chip industry.
The package will support more than $100 billion in US investments from Intel, including efforts to produce cutting-edge semiconductors at large-scale plants in Arizona and Ohio, the Commerce Department announced Wednesday. The money also will help pay for equipment research and development and advanced packaging projects at smaller facilities in Oregon and New Mexico.
In addition, Intel has indicated that it plans to tap investment tax credits from the Treasury Department that could cover as much as 25% of capital expenditures, according to the Commerce Department.
On Wednesday, President Joe Biden will tour an Intel campus in Phoenix and announce a preliminary agreement with Intel for a major award from the 2022 Chips and Science Act. Intel is the first company to land a preliminary Chips Act funding deal for advanced chipmaking facilities.
Intel shares were up 3.5% in premarket trading. They’d previously closed at $42.05 and had declined 16% this year.
The Chips Act set aside $39 billion in grants — plus loans and guarantees worth $75 billion — to convince chip companies to build factories on American soil. The hope is to reverse a decades-long shift of semiconductor production to Asia. Commerce Secretary Gina Raimondo has said the US aims to produce one-fifth of the world’s advanced logic chips by the end of the decade, and that Intel’s investments are a key part of that goal.
For Intel, the facilities are part of an ambitious turnaround bid under Chief Executive Officer Pat Gelsinger. The effort has included building up a foundry business — an operation that makes chips for other companies — and Intel recently secured Microsoft Corp. as a high-profile…
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