Biden is giving Intel $8.5 billion for big semiconductor projects in 4 states
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Intel CEO Pat Gelsinger shows President Biden a semiconductor wafer during a tour at the company's Ocotillo Campus in Chandler, Ariz. on March 20.Brendan Smialowski / AFP via Getty Images -
President Biden boards Air Force One at Harry Reid International Airport as he departs Las Vegas for Phoenix on March 19.Brendan Smialowski / AFP via Getty Images -
President Biden walks with Intel CEO Pat Gelsinger at an Intel site near New Albany, Ohio, on Sept. 9, 2022.Saul Loeb / AFP via Getty Images -
Brad Gist, 30, works with Liam Levinson, 28, during a lab for a 10-day semiconductor course at Chandler Gilbert Community College in Mesa, Ariz., on Oct. 11, 2023.Caitlin O'Hara for NPR
CHANDLER, Ariz. — President Biden announced a deal with Intel that will give the chipmaker up to $8.5 billion in grants and another $11 billion in loans to build semiconductor plants in four states — the biggest project to date in his push to bring chips manufacturing back to America.
The funding comes from the CHIPS and Science Act passed by Congress in 2022 to pour more than $52 billion into projects to dramatically boost U.S. production of the tiny electronic devices found in everything from cars to cell phones to military weapons.
The deal with Intel — which is preliminary and still involves due diligence to finalize — will see the company invest more than $100 billion of its own money into the projects. Intel expects to offset that investment by claiming as much as $25 billion in investment tax credits, the company's CEO Pat Gelsinger told reporters.
These are the kinds of jobs Biden has been campaigning on
All told, Biden said the Intel projects will create nearly 30,000 construction and factory jobs. They are an example of the kinds of jobs he is campaigning on as he makes his pitch for a second term — jobs made possible by his brand of government intervention in the private sector, an industrial policy that had, for decades, fallen out of fashion.
Biden announced the funding during a swing through two battleground states that are key to his reelection campaign — Arizona and Nevada — where he is trying to change the perception that the economy was better under the policies of former President Donald Trump, his opponent in November.
Trump had also promoted policies he said would support American manufacturing, like tariffs to keep out imports and tax cuts for corporations.
But Biden said his investments in manufacturing had help the economy rebound. "It's a fundamental break from the trickle-down economics supercharged by my predecessor," Biden said during his remarks at Intel's Ocotillo campus outside of Phoenix.
"On his watch, companies sent American jobs overseas for cheaper labor, and imported products," Biden said.
These plants will make a kind of chip not currently made in the United States
The investment by Intel will give the United States a foothold in leading-edge logic chips — the kind of semiconductors used for artificial intelligence and military systems. Right now, these chips are all made overseas.
"I was stunned at how thin the fibers are," Biden said after examining a chip during a tour — fibers he described as being the width of a strand of human DNA.
"Amazing to me. I'll be darned. Well, you're bringing the future back to America, man," he said.
Commerce Secretary Gina Raimondo told reporters she wants to see 20% of these advanced chips made in the United States by 2030, and said the Intel projects would make that achievable.
"We rely on a very small number of factories in Asia for all of our most sophisticated chips. That's untenable and unacceptable. It's an economic security problem. It's a national security problem. And we're going to change that," she told reporters.
The company will build two new plants in each of Chandler, Ariz., and New Albany, Ohio, and will modernize a fifth existing plant in Arizona.
It's a big government program, but it may not be enough, Intel's CEO says
In New Mexico, Intel will overhaul two plants to make them into specialized advanced packaging facilities — another capability that is not currently available domestically, Raimondo told reporters. Intel will also expand and modernize its research and development facility in Oregon.
The deal involves $50 million funding for training workers, agreements on using union labor and arrangements for providing childcare to employees, the White House said.
Despite the massive investment in the sector from the CHIPS legislation, it may not be enough, said Gelsinger, CEO of Intel, who told reporters a "CHIPS II" infusion of government aid may be needed down the road.
"I don't think CHIPS I is the end of what we need to do to rebuild the industry," he said. "It took three decades for this industry to sediment away from the United States and the Western world. It doesn't get fixed in one three- to five-year program. I do think more is required," he said.
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Transcript
STEVE INSKEEP, HOST:
President Biden is making campaign stops in three Western states. He's telling audiences his administration is strengthening the economy, and he's working to remind them of economic lows at the end of the Trump administration.
Today's stop is in Arizona, which is both a presidential swing state and the location of a new federal investment, which we're going to discuss with NPR White House correspondent Deepa Shivaram in Phoenix. Good morning.
DEEPA SHIVARAM, BYLINE: Hey. Good morning, Steve.
INSKEEP: What's the government going to pay for?
SHIVARAM: Right. So Biden's announcing a huge investment that stems from the CHIPS and Science Act that he signed into law two years ago. That bill's goal was to increase the production of semiconductor chips here in the U.S., which are those tiny pieces of technology that are found in everything from smartphones to refrigerators.
INSKEEP: Yeah.
SHIVARAM: This investment that Biden is announcing today for Intel - that's the company that has a plan to build and overhaul factories in four states, including Arizona. And once all the details are worked out, the government plans to give Intel $8.5 billion in grants and another 11 billion in loans. And the kind of semiconductor chips made at these new plants are advanced ones. They're going to be used for things like AI in military systems. And currently, those kinds of chips are only made overseas.
INSKEEP: Yeah.
SHIVARAM: The White House says that this will create about 30,000 jobs overall, and that's spread across Arizona and three other states, including Ohio, New Mexico and Oregon.
INSKEEP: So many layers to this, one of them being national security - the United States wants to make this vital technology at home - another one being economic development. And then there's the politics. You just mentioned some states there. Some of them are swing states. Some of them are red states. What is Biden saying, though, in other states where these investments are not going?
SHIVARAM: Yeah. So we're in Arizona right now, but yesterday we were in Nevada. And Biden's message to folks in Nevada, where we were, was to kind of acknowledge that the economy was really bad at this time four years ago, during the pandemic. And he says Trump was the one who was president at that time.
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PRESIDENT JOE BIDEN: As I travel the country, folks often tell me how, back in 2020, they were down. They lost their business. They lost faith in the system. But then, the laws we passed and the work we've done together got them back on their feet.
SHIVARAM: And Biden here is trying to make the argument that he's done a lot of things since then to try and improve the economy since the pandemic, since the economic fallout from it. He says, if Trump were to be president again, Trump would focus on tax cuts for the wealthy, for example, whereas Biden has been saying that he thinks billionaires should be paying their fair share in taxes. And Biden also outlined his own ideas to help lower costs for Americans - things like making housing more affordable, prescription drugs more affordable - and that's the message that he took to Nevada yesterday.
INSKEEP: They've got all these items they can talk about, but the White House knows very well voters' perception of the economy overall has been negative. They keep hoping the perception will catch up to the numbers that the White House sees. Has that perception been improving?
SHIVARAM: I mean, Biden still has some work to do, especially in states like Nevada, where the economy recovered slowly from COVID, as we said. And it's just been a much steeper climb than in other states. And with communities of color, Steve, like Latino voters, they haven't been showing a lot of enthusiasm for the president lately, in part over the economy. But there are things that you can see the Biden campaign shifting more focus on to turn this around. He's really trying to draw much stronger contrasts with Trump on the economy and with Latino voters specifically. The campaign launched an ad this week that talks about prescription drug costs. And yesterday in Phoenix, Biden launched his campaign program called Latinos Con Biden at a Mexican restaurant to drum up more support from the community. You know, he won this state by a narrow margin in 2020. And if he wants to do it again, he's going to need strong turnout from Latino voters.
INSKEEP: NPR's Deepa Shivaram in Phoenix - thanks so much.
SHIVARAM: Thank you. Transcript provided by NPR, Copyright NPR.
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