Biden Administration's Major Investment in U.S. Semiconductor Industry with Intel and Others

Key Points

• The Biden administration has committed up to $8.5 billion in grants and up to $11 billion in loans to Intel for semiconductor projects, as part of the CHIPS and Science Act.
• Other companies, including GlobalFoundries and Microchip Technology, have received government grants to expand U.S. semiconductor production.
• Future awards are expected for Samsung and TSMC, with the Commerce Department having substantial funding and lending authority to support the industry.

In this news

The Biden administration has taken a significant step towards revitalizing the U.S. semiconductor industry by signing a preliminary agreement with Intel Corporation. This agreement, under the CHIPS and Science Act, allocates up to $8.5 billion in grants and offers up to $11 billion in loans to Intel for enhancing semiconductor manufacturing and R&D at its facilities in Arizona, New Mexico, Ohio, and Oregon. Intel's commitment includes a massive investment exceeding $100 billion over five years, anticipated to generate thousands of jobs and bolster the U.S. position in high-tech manufacturing.

Other companies like GlobalFoundries and Microchip Technology have also received substantial funding, with $1.5 billion and $162 million in grants respectively, to expand their semiconductor production capabilities. BAE Systems is set to receive $35 million to increase chip production for military and commercial use. These investments are part of a broader strategy to reduce reliance on foreign chip manufacturing, particularly from China and Taiwan, and to restore the U.S.'s share in the global semiconductor market.

Looking ahead, the administration is expected to announce further awards to major players such as South Korea's Samsung and Taiwan's TSMC. With over $70 billion in requests and $75 billion in lending authority, the Commerce Department is poised to make a transformative impact on the industry. These moves not only aim to secure the semiconductor supply chain but also to reassert American leadership in a critical technology sector, with potential political implications in key states like Arizona.