Sources say Biden will announce the Intel chip grant in Arizona next week

Written by Alexandra Alper, David Shepardson, and Jeff Mason

WASHINGTON (Reuters) – President Joe Biden and Commerce Secretary Gina Raimondo plan to unveil next week in Arizona a multibillion-dollar award for Intel to expand U.S. chip production, two people familiar with the matter said on Thursday.

Intel, which according to one source also invited customers and suppliers to the event, declined to comment.

The company has sought grants to fund expansion plans in both Ohio and Arizona, a crucial political swing state that Biden, who is running for re-election against Republican Donald Trump, hopes to win in November.

Intel's award, a mix of grants and loans, will be the most significant to date since the Chips and Science Act of 2022, America's attempt to boost domestic semiconductor production with $52.7 billion in funding, including $39 billion in subsidies for semiconductor production. Connectors. And $11 billion for research and development.

Last month, the Biden administration awarded $1.5 billion to GlobalFoundries, the world's third-largest chipmaker, to build a new semiconductor production facility in Malta, New York, and expand existing operations there and in Burlington, Vermont.

In January, the US Commerce Department said it planned to award Microchip Technology $162 million in government grants, allowing Microchip to triple production of mature semiconductor chips and microcontrollers at two US factories.

Awards from South Korea's Samsung and Taiwan's TSMC are expected to be distributed in the coming weeks.

The goal is to reduce dependence on China and Taiwan, where the share of global semiconductor manufacturing capacity in the United States has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.

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Intel's grant will bolster Arizona's position as a local chipmaking powerhouse, with Taiwan's TSMC announcing a new Phoenix-based facility in 2020 and Intel unveiling plans to add two factories to its Chandler campus there last year.

Intel also announced plans to build a $20 billion chip-making complex in Albany, Ohio, but the Wall Street Journal reported last month that construction is not expected to be completed until late 2026.

(Reporting by Alexander Alper, David Shepardson and Jeff Mason; Editing by Leslie Adler, Margarita Choi and Chris Sanders)

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