Intel will receive a boost from the US Government of 20 billion dollars – about 18.5 billion euros – to boost its factories in the country and gain ground in the global race for semiconductors and digitalization. Specifically, there will be 8,500 million in aid and 11,000 million in loans. The technology giant expects to add another 25 billion in tax benefits.
The amounts are included in the Chips and Science Act, a subsidy program with which Washington puts on the table 39,000 million in aid and up to 75,000 million in loans and guarantees to lead the sector in the face of Chinese strength.
The company plans an investment of about 100 billion dollars: a third will go to build or improve factories. The centerpiece of the plan is to convert land in Columbus, Ohio, into what CEO Pat Gelsinger describes as “the world’s largest AI chip manufacturing site” starting in 2027. It will also redevelop facilities in New Mexico, Oregon and Arizona.
The centerpiece of the plan is to convert empty fields near Columbus, Ohio, into what CEO Pat Gelsinger describes as “the world’s largest AI chip manufacturing site,” operational as early as 2027. It will also retrofit facilities in New Mexico, Oregon and Arizona. In total, it will generate about 30,000 jobs between construction and manufacturing.
For decades, Intel led the world in making the fastest, smallest semiconductors, selling them at a premium price and investing profits into more research and development to stay ahead. But it lost that advantage in the 2010s to TSMC or Samsung and its profit margins plummeted as it opted to cut prices to maintain market share with inferior products.
Gelsinger announced a plan in 2021 to return Intel to the number one position, but for the plan to be profitable, he has said he would need government support.