The Biden administration has reached an agreement to provide Intel with up to $8.5 billion in direct financing and $11 billion in loans for computer chip factories in Arizona, Ohio, New Mexico and Oregon. Intel said the new funding, as well as additional investments, will create a total of 30,000 jobs in the manufacturing and construction sectors.

President Joe Biden plans to discuss the investment on Wednesday while visiting the Intel campus in Chandler, Arizona, which could be a decisive swing state in the November election. He has often said that not enough voters know about his economic policies and suggested that more voters would support him if they did.

Funding will come from the two parties CHIPS and Science Acta law Biden signed in 2022 to invest $200 billion in domestic production of semiconductor computer chips with the aim of reducing U.S. dependence on foreign chip makers.

Commerce Secretary Gina Raimondo said the deal reached through her department would position the country to produce 20% of the world’s most advanced chips by 2030, up from the current level of zero. The US designs advanced chips, but its inability to make them domestically has proven to be a threat to national security and the economy.

“Failure is not an option – advanced chips are at the core of our innovation system, especially when it comes to advances in artificial intelligence and our military systems,” Raimondo said during a call with reporters. “We can’t just design chips. We have to make them in America.”

The funding announcement comes amid the heat of the 2024 presidential campaign. Biden has told voters that his policies have led to a revival of U.S. manufacturing and job growth. His message is a direct challenge to former President Donald Trump, the presumptive Republican nominee, who raised tariffs while in the White House and wants to do so again on the promise of protecting American factory jobs from China.

Intel said the Biden administration’s funding, as well as previously announced plans to invest more than $100 billion in the U.S. over five years, will lead to the creation of 10,000 jobs within the company and about 20,000 construction jobs. It expects the funding will also support more than 50,000 indirect jobs with suppliers and other businesses.

Biden narrowly defeated Trump in Arizona in 2020 by a margin of 49.4% to 49.1%.

White House officials want to get federal funding for advanced chip technology out the door as quickly as possible so the Biden campaign can point to concrete progress on one of the White House’s signature programs, analysts at political risk consultancy Eurasia Group said in a report.

American adults take a dim view of Biden’s economic leadership, with just 34% approving, according to a February poll by The Associated Press-NORC Center for Public Affairs. The lingering impact of inflation hitting a four-decade high in 2022 has hurt the Democrat, who had a 52% approval rating on the economy in July 2021.

Investing in American chip production

The Biden administration helped push the CHIPS Act through Congress at a time of post-pandemic concerns that loss of access to Asian-made chips could plunge the U.S. economy into a recession.

In pushing for the investment, lawmakers expressed concerns about China’s attempts to control Taiwan, which accounts for more than 90% of advanced computer chip production.

Ohio Sen. Sherrod Brown, a Democrat up for re-election this year, emphasized that his state would become “a world leader in semiconductor manufacturing” as Intel would generate thousands of jobs. Ohio has voted for Trump in the past two presidential elections, and Brown will face Republican Bernie Moreno, a Trump-backed businessman from Cleveland, in November.

Wednesday’s announcement is the fourth and largest yet under the chips law, with government support expected to allow Intel to make $100 billion in capital investments over five years. About 25% of that total would be for buildings and land, while roughly 70% would go to equipment, Intel CEO Pat Gelsinger said.

“We view this as a defining moment for the United States, the semiconductor industry and for Intel,” said Gelsinger, who called the CHIPS Act “the most critical industrial policy legislation since World War II.”

Intel’s funding will go to four states

Intel’s CEO said on a call with reporters that he would like to see a follow-up to the 2022 law to provide additional funding for the industry.

Biden administration officials say that without government support, computer chip companies would not invest domestically on the scale expected. Intel also plans to claim Treasury tax credits worth up to 25% on qualified investments.

The Santa Clara, California-based company will use the funding in four different states. In Chandler, Arizona, the money will help build two new chip factories and modernize an existing one. The funding will build two state-of-the-art manufacturing plants in New Albany, Ohio, just outside the state capital of Columbus.

The company will also convert two of its factories in Rio Rancho, New Mexico, into advanced packaging facilities. And Intel will also modernize facilities in Hillsboro, Oregon.

The Biden administration has also made workforce training and access to affordable childcare a priority in deals to support businesses. Under the agreement with the Commerce Department, Intel will, among other things, commit to local training programs and increase the reimbursement amount for its child care program.

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