On November 26, 2024, Intel Corporation announced a significant development alongside the Biden-Harris Administration, confirming plans to allocate up to $7.86 billion aimed at enhancing U.S. semiconductor production. This funding is part of the U.S. CHIPS and Science Act, demonstrating the administration's commitment to boosting domestic manufacturing capabilities for advanced technology.
The funding agreement reached between the U.S. Department of Commerce and Intel will primarily facilitate the company’s semiconductor manufacturing projects across various states, including Arizona, New Mexico, Ohio, and Oregon. Intel’s CEO, Pat Gelsinger, expressed optimism about this investment, emphasizing its importance for restoring American technology leadership and the overall economic expansion of the country. According to Gelsinger, "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."
This groundbreaking investment is part of broader initiatives initiated under the CHIPS Act, which Congress passed more than two years ago. Since then, Intel has pledged over $100 billion to expand its domestic semiconductor production as the company aims to fortify the U.S. supply chain and security for technological advancements. Not only is this initiative projected to create tens of thousands of jobs, but it also focuses on investing heavily in research and development efforts within the United States.
U.S. Secretary of Commerce Gina Raimondo heralded the award as transformative, stating, "The CHIPS for America program will supercharge American technology and innovation and make our country more secure – and Intel is expected to play an important role in the revitalization of the U.S. semiconductor industry." This sentiment is echoed widely as the Biden administration continues to push for investments to facilitate domestic production of key technologies, particularly at this time when global supply chains face increasing challenges.
Meanwhile, the pursuit of ensuring domestic semiconductor manufacturing isn't solely limited to large corporations like Intel. The U.S. Commerce Department is also accelerating its initiatives to provide targeted subsidies to smaller firms engaged in semiconductor production. Recently, nearly $60 million worth of subsidies have been earmarked for companies such as BAE Systems and Rocket Lab, which will enable these organizations to contribute significantly to the semiconductor supply chain.
For BAE Systems, which specializes in manufacturing chips for sophisticated military hardware including F-35 fighter jets, the government has promised $35.5 million aimed at quadrupling production capacity at its New Hampshire facility, effectively halving the expected modernization timeline. Given the Pentagon's plans to invest around $1.7 trillion over decades on the F-35 program alone, securing U.S. production sources for key components is not just beneficial, it is also strategically imperative.
Rocket Lab, on the other hand, has received $23.9 million to boost the production of compound semiconductors at its SolAero Technologies Corp unit. These chips find utility across various North American space programs, including NASA’s lunar exploration efforts and missile awareness systems, among other applications.
Commerce Secretary Gina Raimondo highlighted this urgency, speaking about the necessity of finalizing these agreements before the upcoming transition of administration posing political uncertainties. She pointed out the significance of fostering partnerships between government and private sector stakeholders to secure America’s technological future. "We need to complete as many agreements as we can under the Biden administration’s $52.7 billion ‘Chips and Science’ program before any shifts potentially compromise our objectives," she asserted.
Other major recent agreements to bolster semiconductor manufacturing capability include $6.6 billion awarded to Taiwan Semiconductor Manufacturing Co. and $1.5 billion to GlobalFoundries, underlining the government’s commitment to revitalizing this sector. These actions reflect the bipartisan recognition of the strategic importance of the semiconductor industry for national security, technological dominance, and economic resilience.
Overall, Intel's and other companies’ engagements serve as part of wider national efforts to reinforce the semiconductor industry on domestic soil, which is increasingly viewed as not only a business necessity but also as pivotal to maintaining security interests amid growing tensions and competition on the global technological stage.
The ramifications of these historical investments are substantial, paving the way for innovation and competition not just at home, but across the globe. They embody the United States' ambition to reclaim its former standing as the leader of semiconductor production.
