President Joe Biden is set to announce Wednesday one of the biggest federal investments in US chip manufacturing – a $8.5 billion grant to tech giant Intel – as he visits the battleground state of Arizona and struggles to get his key legislative accomplishments to register with voters.
It will take years for new manufacturing projects to become operational, and there are already some environmental concerns about whether there is enough water in Arizona to support the needs of chip manufacturing into the future.
The funding for several Intel projects – in Arizona and three other states – comes from the CHIPS and Science Act, one of Biden’s biggest legislative wins that passed Congress with bipartisan support in the summer of 2022. The Biden administration has announced awards for just three other companies under the CHIPS Act to date as it takes time to vets applicants.
The law aims to boost domestic manufacturing of semiconductor chips. Once a leader in the industry, the US currently manufactures only about 10% of the global supply and none of the most advanced kind of chips that are needed for artificial intelligence technologies.
The CHIPS Act funding is meant to rectify what Commerce Secretary Gina Raimondo described on a call with reporters as a “national security problem” because of America’s reliance on Asia for production of most of the leading-edge chips.
The preliminary funding agreement announced Wednesday – which includes the $8.5 billion grant and up to $11 billion in loans – will help support construction, expansion, or modernization of Intel facilities in Arizona, Ohio, New Mexico and Oregon. The money will be disbursed in phases, based on when Intel reaches certain milestones, and is expected to start flowing “by the end of this year,” a senior administration…
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