Biden touts government investing $8.5 billion in Intel's computer chip plants in 4 states
President Joe Biden plans to talk up the investment on Wednesday as he visits Intel's Ocotillo campus in Chandler, Arizona. The funding would lead to 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.
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Washington: The Biden administration has reached an agreement to provide Intel with up to $8.5 billion in direct funding and $11 billion in loans for computer chip plants in four states, a cash infusion that the government says should help the US boost its global share of advanced chip production from zero to 20 per cent. President Joe Biden plans to talk up the investment on Wednesday as he visits Intel's Ocotillo campus in Chandler, Arizona, which could be a decisive swing state in November's election.
The Democratic president has often said that not enough voters know about his economic policies and suggested that more would support him if they did know. Commerce Secretary Gina Raimondo said the deal reached through her department would put the United States in a position to produce 20 per cent of the world's most advanced chips by 2030 with Intel investing in facilities in Arizona, Ohio, Oregon and New Mexico. The United States designs advanced chips, but its inability to make them domestically has emerged as 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 on a call with reporters. “We can't just design chips. We have to make them in America.” The funding announcement comes amid the heat of the 2024 presidential campaign. Biden has been telling voters that his policies have led to a resurgence in US manufacturing and job growth. His message is a direct challenge to former President Donald Trump, the presumptive Republican nominee, who raised tariffs while in the White House and wants to do so again on the promise of protecting US factory jobs from China.
Biden narrowly beat Trump in Arizona in 2020 by a margin of 49.4 per cent to 49.1 per cent. US adults have dim views of Biden's economic leadership, with just 34 per cent approving, according to a February poll by The Associated Press-NORC Centre for Public Affairs. The lingering impact of inflation hitting a four-decade high in 2022 has hurt the Democrat, who had a 52 per cent 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 shepherd through Congress at a time of concerns after the pandemic that the loss of access to chips made in Asia could plunge the US economy into recession.
When pushing for the investment, lawmakers expressed concern about efforts by China to control Taiwan, which accounts for more than 90 per cent of advanced computer chip production. Ohio Sen. Sherrod Brown, a Democrat up for reelection this year, stressed that his state would become "a global leader in semiconductor manufacturing” as Intel would be generating thousands of jobs. Ohio has voted for Trump in the past two presidential elections, and Brown in November will face Republican Bernie Moreno, a Trump-backed businessman from Cleveland. Wednesday's announcement is the fourth and largest so far under the chips law, with the government support expected to help enable Intel Corp. to make $100 billion in capital investments over five years.
About 25 per cent of that total would involve building and land, while roughly 70 per cent would go to equipment, said Pat Gelsinger, CEO of Intel. “We think of this as a defining moment for the United States, the semiconductor industry and for Intel,” said Gelsinger, who called the CHIPS Act “the most critical industrial policy legislation since World War II.” The Intel CEO said on a call with reporters that he would like to see a sequel to the 2022 law in order to provide additional funding for the industry. Biden administration officials say that computer chip companies would not be investing domestically at their expected scale without the government support.
Intel funding would lead to a combined 30,000 manufacturing and construction jobs. The company also plans to claim tax credits from the Treasury Department worth up to 25 per cent 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 build two new chip plants and modernize 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 turn two of its plants 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.
