The Biden administration may announce billions in government CHIPS subsidies to offset the cost of Intel’s US fab expansion as early as next week.
Citing sources familiar with the matter, Reuters said US President Joe Biden and Commerce Secretary Gina Raimondo will unveil the multi-billion dollar funding package during an event at Intel’s Arizona campus in Chandler.
In the nearly three years since CEO Pat Gelsinger announced Intel would open its chip plants to contract manufacturing, the x86 giant has announced four factories, two in Arizona and two in Ohio, collectively valued at $50 billion.
At a foundry event late last month, Gelsinger revealed his plan to make Intel the second largest supplier of silicon behind TSMC by 2030.
This commitment makes Intel a top contender for the $39 billion in CHIPS and Science Act funding earmarked to support the development of domestic chip fabs. Signed into law in mid-2022, the bill sought to reduce America’s reliance on the Asia-Pacific region for leading-edge semiconductor manufacturing.
Up to this point, the US Commerce Department has only announced a handful of awards totaling less than two billion bucks. This included $35 million for BAE, $162 million for Microchip and, most recently, a $1.5 billion award to GlobalFoundries.
However, Intel, TSMC, and Samsung, which have collectively committed to adding more than $100 billion in leading-edge semiconductor capacity in the United States, are expected to walk away with the lion’s share of CHIPS funds. During a press conference in February, Raimondo warned chipmakers not to get their hopes up and that those that did receive taxpayer funding were likely to get less than expected.
According to Bloomberg, Intel was expected to receive upwards of $10 billion in US CHIPS funds. It’s not clear whether this includes or is addition to the $3.5 billion Intel is slated to receive to establish a “secure domain” for the production of military silicon. This week, we learned that the Pentagon, which had committed to funding $2.5 billion of the project, had pulled out, leaving the Commerce Department to foot the bill.
As a result, Intel, true to Raimondo’s warnings, could end up getting far less than hoped.
Samsung and TSMC queue up
TSMC and Samsung Electronics, two top-rank manufacturers of cutting-edge silicon today, are also expected to receive CHIPS awards in the coming weeks.
A Bloomberg report Friday citing unnamed sources revealed Samsung could receive as much as $6 billion in CHIPS cash. Some folks also told the news wire TSMC would get $5 billion from Uncle Sam.
Both foundry outfits have made major investments in US semiconductor capacity over the past few years. Under pressure from the Trump administration TSMC announced plans to construct a fab in Arizona back in 2020. Since then, the project has grown considerably to encompass two factories valued at $40 billion.
A little over a year later, Samsung announced it would construct a $17 billion plant in Texas. According to Bloomberg the $6 billion in CHIPS subsidies will support the development of additional sites.
It’s not yet clear how many more fabs Samsung has planned or where they might be located. But as we’ve previously reported, documents filed with the Texas comptroller in mid-2022 suggest the Korean giant could add as many as 11 facilities over the next two decades. ®
