The Biden administration is granting Intel up to $3 billion in additional funding under the CHIPS Act to boost domestic semiconductor production. However, this money comes with strict conditions.
The US government has promised chip manufacturer Intel further financial support of up to $3 billion as part of the CHIPS and Science Act. This funding is earmarked for the "Secure Enclave" program, which aims to improve microelectronics supply for the US Department of Defense.
This new funding adds to the $8.5 billion already granted in March. A senior government official said the first payments should be made before the end of the year.
Intel plans to use these funds to build foundry facilities in four US states to increase domestic semiconductor production for other suppliers. Chris George, President and General Manager of Intel Federal, said these investments should help strengthen the domestic semiconductor supply chain and ensure US leadership in advanced manufacturing, microelectronic systems and process technology.
CHIPS billions come with strict conditions
However, funding through the CHIPS Act is subject to strict conditions introduced in the fall of 2022. Companies that receive funds from this program are not allowed to build any cutting-edge technology facilities in China for a period of ten years. TSMC also benefits from the public funds.
The restrictions go beyond the construction of plants. The subsidies may generally not be used for investments in China and the companies may not export new technologies to China. These measures are part of a broader strategy by the US government to reduce its dependence on foreign, particularly Chinese, semiconductor manufacturers.