Intel has signed a non-binding preliminary memorandum of terms, or PMT, with the U.S. Department of Commerce for $8.5 billion in potential CHIPS and Science Act funding.
With this investment, Intel intends to upgrade chip manufacturing sites in Arizona, New Mexico, Ohio and Oregon to advance various research and development programs, the Santa Clara, California-based company announced on Wednesday.
Microelectronics are key components of building advanced technologies such as artificial intelligence, which Intel CEO Pat Gelsinger said is “supercharging the digital revolution.”
As the sole U.S. company that develops and produces logic chips, Intel is a major player in the nation’s efforts to perfect this new technology. According to Gelsinger, the funds would “help to ensure that Intel and the U.S. stay at the forefront of the AI era.”
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The PMT is part of a joint effort between the Commerce Department and Intel to invest a total of over $100 billion into the U.S. microelectronics industry.
Secretary of Commerce Gina Raimondo said the deal is “one of the largest investments ever in U.S. semiconductor manufacturing.” She noted that it will create over 30,000 jobs.
The investment gives Intel the choice to utilize up to $11 billion in federal loans. The company also expects to claim the Department of the Treasury’s Investment Tax Credit, which could potentially reach 25 percent of qualified investments of over $100 billion in a five-year period.
Through the agreement, Intel aims to promote U.S. technology leadership and improve its Intel Foundry and finance R&D initiatives focused on microelectronics. The organization will also work to cultivate the future semiconductor workforce while increasing supply chain resilience and sustainability.
This announcement follows a recent move in which the Department of Defense canceled its plan to provide $2.5 billion in CHIPS and Science Act funding to Intel, pushing the responsibility to the Commerce Department.