Intel to Receive $8.5 Billion in Grants to Build Chip Plants

President Biden plans to announce on Wednesday that his administration will award up to $8.5 billion in grants to Intel, a major investment to bolster the nation’s semiconductor production, during a tour of battleground states meant to sell his economic agenda.

Mr. Biden is set to make the announcement during a visit to the Intel campus in the Phoenix suburb of Chandler, Ariz., White House officials said. The award, which will go to the construction and expansion of Intel facilities around the United States, is the biggest the federal government has made with funding from the CHIPS Act, which lawmakers passed in 2022 to help re-establish the United States as a leader in semiconductor manufacturing.

The Biden administration, equipped with $39 billion in subsidies to distribute, is spearheading an ambitious effort to ramp up production of the tiny chips that power everything from smartphones to computers and cars. The effort is at the center of Mr. Biden’s goal to reduce America’s reliance on foreign countries: Although semiconductors were invented in the United States, only about 10 percent of the world’s chips are made domestically.

In addition to the grants, the federal government is planning to award Intel up to $11 billion in loans on what the company characterized as generous terms. Intel is also expected to claim federal tax credits that could cover 25 percent of the expense of its U.S. expansion projects, which are expected to cost more than $100 billion over five years.

The grants are intended to help fund the company’s construction plans in Arizona, Ohio, New Mexico and Oregon. The projects are expected to create more than 10,000 manufacturing jobs and roughly 20,000 construction jobs, according to Biden