American semiconductor maker Intel wants to build “the largest AI chip manufacturing site in the world,” in a new five-year, $100 billion U.S. expansion plan.
Intel CEO Pat Gelsinger told reporters this week that the chipmaker is focused on building the manufacturing site on empty land near Columbus, Ohio, one of the four states the company is investing in, and the work could start as early as 2027.
Big CHIPS bets
Included in Intel’s $100 billion spending spree: Nearly $20 billion in federal funding and loans from the U.S. government, tendered by the Biden administration’s CHIPS and Science Act. Passed in August 2022, the act focuses on investing in American semiconductor companies to regain dominance in the chipmaking race. Intel is set to receive up to $8.5 billion in direct government funding, and is eligible for up to $11 billion in federal loans.
Intel’s funding from the act was announced by the U.S. Department of Commerce on Wednesday (Mar. 20), and will support the chipmaker’s plans to expand its U.S. semiconductor presence with chipmaking plants in Arizona, New Mexico, Ohio, and Oregon over the next 5 years.
“Today is a victory for Americans’ national economy, but also our national security, “ Intel CEO Pat Gelsinger said Wednesday at an announcement featuring U.S. President Joe Biden at Intel’s Ocotillo Campus in Chandler, Arizona. “In the modern world, everything relies on chips. Every aspect of humanity is going digital, and relies on chips. And their production shapes the future of all of humanity.”
Gelsinger also referenced the U.S.’s chip war with China, saying the funding shows “America will not surrender leadership to our competitors.” He added that the U.S. needs to regain its leadership “especially with the turbocharged acceleration that AI is providing to our world.” Although the U.S. once led the way in semiconductor development, the nation produces less than 10% of the world’s chips today, according to the U.S. White House, and doesn’t have a hand in the most advanced semiconductors currently available.
The company’s investment into U.S. semiconductor factories is expected to create around 80,000 jobs, Gelsinger said, including company and construction jobs, and indirect jobs for suppliers and adjacent industries. Intel said it plans to benefit from an investment tax credit through the U.S. Treasury Department of up to 25% on over $100 billion in qualified investments.
Barbara Terrio is a seasoned business journalist, delving into the world of finance, startups, and entrepreneurship. With a knack for demystifying complex economic trends, she helps readers navigate the business landscape. Outside of her reporting, Barbara is an advocate for financial literacy and enjoys mentoring aspiring entrepreneurs.
