President Biden will give a multimillion-dollar award to Intel on Wednesday to expand its chip production in the United States, people familiar with the decision said, as the president defends his economic policies during a tour of the Southwest.
The announcement in Phoenix, Arizona, is a major award from Biden's $39 billion CHIPS and Science Act, which aims to strengthen the U.S. semiconductor industry and reduce reliance on domestically manufactured technology. East Asia.
Biden has made expanding production of chips, which are used in all types of technologies, a central focus of both efforts to compete with China and bolster domestic manufacturing.
White House officials have provided few details about the award to Intel, but an official who spoke on condition of anonymity to discuss the grant said it would be the first for several chipmakers, including Samsung, Micron and Taiwan Semiconductor Manufacturing Company.
The White House hopes to accelerate the execution of its semiconductor investments, but some companies have hit roadblocks. TSMC delayed initial manufacturing at its first Arizona factory until 2025 starting this year, saying local workers lacked experience installing some sophisticated equipment.
Biden administration officials have also emphasized the need to ramp up apprenticeship programs to prepare a workforce that can fill factories in places like Arizona or Texas.
The money is hugely important to Intel and Patrick Gelsinger, who returned as the company's chief executive three years ago and took on the dual mission of restoring Intel's technological leadership in manufacturing and the United States' position in global chip production.
The company's microprocessor chips, which provide computing power to most of the world's computers, are regularly improved thanks to progress at Intel factories in shrinking transistors to include more of those tiny switches in each piece of silicon. . But Intel stumbled in the last decade by offering new generations of manufacturing technology, allowing TSMC and Samsung to start building more advanced chips.
Gelsinger responded with an ambitious plan to introduce five new production processes in four years, along with a radical change in Intel's business model. The company, which for decades reserved its factories to produce the chips it designs and sells, now competes with TSMC and Samsung in the so-called foundry business of making chips designed by others.
It also began a costly expansion campaign that includes new or upgraded factories in Arizona, Ohio, New Mexico, Ireland, Israel and Germany. Gelsinger, perhaps the industry's most vocal advocate for the CHIPS Act, did not wait for money from the Commerce Department before beginning those construction projects.
But he appears impatient with the department's pace of delivering subsidies, an effort that has required complex negotiations between the companies and the new specialists the government has hired.
“We haven't announced our CHIPS grant yet,” Gelsinger said, speaking at a company event in February alongside Gina Raimondo, the Commerce Secretary, who attended via video conference. “Yes, very soon, right?” she asked.
The company, whose business has been hit by a post-pandemic slowdown in sales of computers that use its chips, has used debt financing and other tactics to help finance the expansion. But Gelsinger has made clear that he has faced pressure from Intel board members to justify spending on the new factories, which make chips on silicon wafers and can cost between $10 billion and $20 billion each.
