The White House announced that it has awarded Intel up to $8.5 billion in CHIPS Act funding.

The administration, represented by the White House, announced that Intel has been granted up to $8.5 billion in funding under the CHIPS Act, part of its initiative to bolster semiconductor manufacturing within the United States.

Additionally, Intel stands to potentially secure $11 billion in loans from the CHIPS and Science Act, a legislative measure enacted in 2022. The official declaration of these awards is scheduled to be made by President Joe Biden during an event in Arizona on Wednesday.

In a briefing with reporters, U.S. Secretary of Commerce Gina Raimondo emphasized that this financial support aims to maintain the United States’ leadership in innovative semiconductor technology. Both Intel and the White House clarified that their agreement is tentative and subject to change.

Intel has historically been a significant player in the American semiconductor industry, producing chips that power a multitude of personal computers and data center servers globally. However, the company’s revenue has been overshadowed by competitors such as Nvidia, particularly in the realm of artificial intelligence chips. Additionally, rivals like AMD and Qualcomm have surpassed Intel in terms of market capitalization.

Despite its comparative decline, Intel holds a unique position in the industry due to its ownership and operation of chip fabrication facilities, known as fabs, alongside its processor design capabilities. Unlike Intel, competitors like AMD and Nvidia operate without fabs, opting instead to outsource manufacturing to companies like Taiwan’s TSMC.

TSMC has emerged as a dominant force in advanced semiconductor manufacturing, with most of the world’s cutting-edge processors being produced in Taiwan. This reality underscores the significance of Intel’s potential benefits from initiatives like the CHIPS Act, which aims to incentivize domestic chip production to mitigate supply chain disruptions, particularly in the event of a geopolitical conflict involving Taiwan.

Intel plans to allocate its CHIPS Act funding toward establishing fabs and research facilities in several U.S. states, including Arizona, Ohio, New Mexico, and Oregon. This investment is part of Intel’s broader commitment to inject $100 billion into U.S.-based programs and infrastructure. The company has set a target to regain its competitive edge in leading-edge manufacturing by 2026.

The planned Ohio fab, with a projected cost exceeding $20 billion, is anticipated to commence production by 2027 or 2028. Intel also intends to expand its manufacturing presence in Arizona and New Mexico, with these projects expected to create thousands of jobs in fab construction and chip manufacturing.

Intel’s CEO, Pat Gelsinger, highlighted the significance of the Ohio facility, emphasizing its potential to become a major manufacturing hub for AI chips in the United States.

Other entities, including GlobalFoundries, Microchip, and BAE Systems, have also received funding under the CHIPS Act, as confirmed by the Semiconductor Industry Association. It’s anticipated that TSMC will also receive funding for a fab in Arizona, which will be utilized for manufacturing chips for companies like Apple and AMD.