Biden to announce Intel chips grant in Arizona next week, sources say

FILE PHOTO: Illustration shows Intel logo

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 multi-billion-dollar award for Intel to expand its chip production in the United States, two people familiar with the matter said on Thursday.

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

The company has sought grants to fund expansion plans in both Ohio and Arizona, a critical 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 be rolled out so far from the 2022 CHIPS and Science Act, America's bid to boost domestic semiconductor output with $52.7 billion in funding, including $39 billion in subsidies for semiconductor production and $11 billion for R&D.

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

In January, the U.S. Commerce Department said it planned to award Microchip Technology $162 million in government grants, allowing Microchip to triple production of mature-node semiconductor chips and microcontroller units at two U.S. factories.

Awards for South Korea's Samsung and Taiwan's TSMC are expected in the coming weeks.

The goal is to reduce reliance on China and Taiwan, as the share of global semiconductor manufacturing capacity in the U.S. has fallen from 37% in 1990 to 12% in 2020, according to the Semiconductor Industry Association.

Intel's grant will cement Arizona's position as a domestic 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 chipmaking complex in Albany, Ohio, but the Wall Street Journal reported last month that construction is not expected to be finished until late 2026.

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