KEY TAKEAWAYS
- The U.S. government awarded Intel up to $8.5 billion in CHIPS Act funding to expand domestic chip production facilities.
- Intel could also be eligible for an additional $11 billion in loans.
- This funding will support the construction and expansion of Intel facilities in Arizona, Ohio, New Mexico, and Oregon, creating nearly 30,000 jobs.
Intel Corp. (INTC) shares rose about 2.5% in premarket trading Wednesday after the White House announced that the chipmaker has been awarded up to $8.5 billion in CHIPS Act funding to expand production in the U.S.
Intel could also receive an additional $11 billion in loans from the CHIPS and Science Act, which was passed in 2022 and is meant to grow U.S. manufacturing of key industries like chipmaking amid growing geopolitical tensions with China.
“The announcement will support the construction and expansion of Intel facilities in Arizona, Ohio, New Mexico, and Oregon, creating nearly 30,000 jobs and supporting tens of thousands of indirect jobs,” the White House statement said.
Over the next five years, Intel expects its U.S. investments to exceed $100 billion, as it expands capacity and capabilities in those four states, the Commerce Department said in a separate statement. Intel will be creating more than 10,000 manufacturing jobs and nearly 20,000 construction jobs, the department said.
Intel, the largest U.S. chip manufacturer by revenue, has received the largest grant from the act so far.
Chipmaker GlobalFoundries (GFS) said last month it had secured a $1.5 billion grant in CHIPS Act funding to build a new facility in New York and expand its operations in Vermont. Microchip Technology Inc. (MCHP) received $162 million in federal funding to boost production of semiconductors and microcontrollers early this year.
Defense contractor BAE Systems (BAESY) was the first company to receive a grant under the CHIPS Act in December, when it got $35 million to modernize an aging factory in New Hampshire, which would allow it to quadruple its production capacity for chips “essential to our national security, including for use in F-35 fighter jets,” the White House said then.
Intel shares are down 12% year to date but up 44% over the past 12 months.