“We received $0 from CHIPS grants” – the head of Intel complained that the US was slowing down payments under the “CHIP Act”

Intel CEO Pat Gelsinger expressed dissatisfaction with the slow implementation of the CHIPS & Science Act. Despite the company’s significant investment – more than $30 billion – in its own production facilities in the United States, Intel still has not received government support. Gelsinger notes that this is slowing down the implementation of critical projects that should strengthen the company’s and the country’s position in the semiconductor market.

Image source: Intel

The US government has yet to provide the company with the funding it promised under the CHIPS Act, signed into law by President Joe Biden more than two years ago. The Intel executive emphasized that his company considers this law very important: “We view the CHIPS Act as a critical initiative in which a lot of effort has been invested. As we’ve said, we’re disappointed by how long it’s taking to implement: It’s been over two years since the law was passed, and during that time I’ve invested $30 billion in American manufacturing and we’ve received $0 in CHIPS grants.”

Since the passage of the CHIPS Act, the company has begun packaging chips at its flagship plant in New Mexico and has also begun construction of new factories in Arizona and Ohio. However, due to lower-than-expected demand for processors and the slow development of Intel Foundry Services (IFS) as a contract chip manufacturer, the launch of the Ohio fab had to be delayed for several years. At the same time, the company continues to invest heavily in expanding its production capacity, emphasizing the importance of high-tech projects for the US national economy. It should be noted that Intel has already received $3 billion under the Secure Enclave program to develop chips for military needs, but these funds do not cover the company’s main civilian projects.

Gelsinger also said that, despite delays in grant payments, the company continues to actively work with officials and maintains a constructive dialogue with them to successfully complete the projects it has begun. He noted that the structure of the CHIPS law provides not only grants, but also tax breaks that are three times the amount of grants. “These tax incentives, enshrined in U.S. tax law, will provide long-term benefits,” Gelsinger added, emphasizing the strategic importance of these incentives for the industry.

At the moment, Intel has received a guarantee for direct investment in the amount of $8.5 billion, as well as the opportunity to attract up to $11 billion in the form of loans and tax breaks for investments up to $100 billion. However, the company has not yet received the promised $8.5 billion, so to continue construction new factories, Intel had to look for alternative sources of financing. One of them was the Semiconductor Co-Investment Program (SCIP), under which Intel’s Fab 52 and Fab 62 manufacturing complexes in Arizona will be controlled by Intel, but 49% of their capital will belong to Brookfield Asset Management .

«We made sure to create a financial structure that would allow us to complete projects regardless of whether CHIPS funds were available or not,” Gelsinger explained. He assured that Intel will continue to implement the strategic plan, despite delays in funding, and expressed confidence in the need for the current law: “We are proud to participate in this program and hope to see it through to completion, because the CHIPS Act is a critical part of US industrial policy.” .