Biden gives Intel $19.5 billion in support to boost chip production

US President Joe Biden’s administration said on Wednesday that it will provide Intel with grants and loans worth nearly $20 billion, giving a huge boost to the company’s domestic production of semiconductor chips and representing the largest amount provided by the government to support the production of advanced chips.

According to Reuters, Biden will announce the initial agreement with grants worth $8.5 billion and loans amounting to $11 billion to Intel in Arizona, where he will direct part of the amount to finance the construction of two factories and another modernization.

US Commerce Secretary Gina Raimondo described the agreement as massive and one of the largest investments ever in the US semiconductor industry.

“This means that cutting-edge semiconductors are manufactured in the United States,” Raimondo said on Tuesday, noting that the administration hopes to increase the US share of cutting-edge chip production from zero percent to 20 percent by 2030 through the subsidy program.

The unprecedented spending shows the Biden administration is betting big on Intel under the Chips and Science Act of 2022, an effort to boost domestic semiconductor production with $52.7 billion in funding, including $39 billion in support for semiconductor production and $11 billion for research and development.