Intel Corporation will receive $7.86 billion in funding from the US Department of Commerce to bolster semiconductor manufacturing and packaging in the United States. This partnership with the Biden-Harris administration falls under the US CHIPS and Science Act and aims to solidify domestic technological leadership. Intel also plans to leverage the investment tax credit for investments exceeding $100 billion.
Following a massive layoff announcement and just preceding Pat Gelsinger’s retirement, Intel announced it would receive $7.86 billion from the US Department of Commerce to boost semiconductor manufacturing and packaging in the United States. This funding is part of the US CHIPS and Science Act, a law passed to strengthen the American semiconductor industry and reduce reliance on foreign manufacturers. Intel will use this funding to expand its domestic chipmaking and advanced packaging capabilities. This is part of Intel’s commitment to invest over $100 billion in these areas since the CHIPS Act was passed.
At the announcement just before Thanksgiving in the US, then Intel CEO Pat Gelsinger stressed the importance of manufacturing semiconductors in the US, highlighting Intel’s dedication to expansion and technological progress. The company is already producing Intel 3, its latest generation of chips, and plans to start producing Intel 18A next year. These advancements are viewed as vital for economic growth and national security.
“With Intel 3 already in high-volume production and Intel 18A set to follow next year, leading-edge semiconductors are once again being made on American soil,” said Gelsinger. “Strong bipartisan support for restoring American technology and manufacturing leadership is driving historic investments that are critical to the country’s long-term economic growth and national security. Intel is deeply committed to advancing these shared priorities as we further expand our US operations over the next several years.”
The announcement underscores the government’s confidence in Intel’s pivotal role in strengthening the US semiconductor supply chain. Since the CHIPS Act’s passage, Intel has outlined plans to invest over $100 billion in expanding its domestic chipmaking and advanced packaging capabilities. These investments aim to support job creation, reinforce supply chain resilience, and advance research and development to secure the US’s position in cutting-edge semiconductor technology.
The funding award follows a thorough review and due diligence process conducted by the Department of Commerce. It is also shaped by congressional mandates, such as allocating CHIPS funding to the $3 billion Secure Enclave program. This program is designed to support secure semiconductor manufacturing for government needs.
Intel’s investments, supported by CHIPS Act funding, target key sites integral to its global semiconductor production and research capabilities. In Arizona, often referred to as the Silicon Desert, Intel operates a major manufacturing hub. In New Mexico, known as the Silicon Mesa, the company focuses on advanced packaging technologies. In Ohio, the Silicon Heartland, Intel is establishing a new state-of-the-art manufacturing site. In Oregon, the Silicon Forest, Intel conducts significant semiconductor research and development. Across these locations, Intel continues its over 50-year history of innovation and contribution to the semiconductor industry, employing approximately 45,000 individuals in the US.
The company has been developing semiconductor nodes, with the Intel 18A process on track for a 2025 launch. Intel has secured notable commitments, including a multiyear partnership with Amazon Web Services to develop custom Intel Xeon chips and AI fabric chips utilizing Intel 3 and Intel 18A processes. Additionally, Intel recently secured a $3 billion manufacturing contract for the Secure Enclave program, which expands trusted semiconductor manufacturing for the US government.
In advanced semiconductor manufacturing, Intel achieved a key milestone with the assembly of the first commercial High Numerical Aperture Extreme Ultraviolet lithography scanner. The company also installed another High Numerical Aperture tool at its R&D site in Hillsboro, Oregon, further positioning itself to drive next-generation chip manufacturing.
Workforce development has been a core component of Intel’s strategy. The company has committed $100 million to expand semiconductor education, research, and workforce training nationwide. Under the CHIPS Act, $65 million has been allocated to Intel’s workforce initiatives. Of this, $56 million will fund training programs for students and educators to meet the industry’s growing demand for skilled professionals. Intel has also introduced a registered apprenticeship program for technicians at its manufacturing facilities.
Gelsinger
On Dec. 1, 2024, Intel CEO Pat Gelsinger retired from the company and stepped down from the board of directors.
Intel has named two senior leaders, David Zinsner and Michelle (MJ) Johnston Holthaus, as interim co-chief executive officers. At the same time, the board of directors is conducting a search for a new CEO. Zinsner is executive vice president and chief financial officer, and Holthaus has been appointed to the newly created position of CEO of Intel Products. This group encompasses the company’s Client Computing Group (CCG), Data Center and AI Group (DCAI), as well as Network and Edge Group (NEX). Frank Yeary, independent board chair at Intel, will become interim executive chair during the transition period. Intel Foundry’s leadership structure remains unchanged.
The board has formed a search committee and stated that it will work diligently and expeditiously to find Gelsinger’s permanent successor.
Gelsinger has had an extraordinary career at Intel, VMware, and at Intel again in 2021, and I never met anyone who didn’t like and admire him.
Trying to turn the gargantuan corporation around was a Herculean task, and he has left the company pointed in the right direction. But, getting all the fiefdoms to march in tune will take a Merlin and maybe a Machiavelli. The likelihood of the company being broken up looks more likely now. However, Intel has discreetly disclosed that the $7.86 billion it received from the US CHIPS Act comes with strings attached. One key condition is that Intel must retain control of its foundries, a valuable asset the company may have considered selling amidst its struggles.