Investment plan

Joe Biden calls Intel’s $20 billion investment plan groundbreaking

Intel has announced a $20 billion investment in two new semiconductor factories in Ohio. Factories won’t be ready to start producing chips until 2025, so the reveal won’t solve the chip shortage that’s making PC gaming so difficult right now (which Intel says will last until the year next), but it could signal the start of a long-term revolution in chipmaking.

President Biden is promoting his administration’s efforts to alleviate the global semiconductor shortage by increasing production in the United States alongside this announcement.

“It’s a game-changer,” Biden remarked in a White House speech on Friday, where he frequently noted the huge impact of shortages on automakers (but not, if you can believe it, gamers on pc). Biden praised Intel for investing heavily in manufacturing in the United States. Last year, Samsung and Micron pledged to do the same.

Biden, along with key IT companies like Intel, AMD and Nvidia, have lobbied Congress to fund the CHIPS Act, which would allocate $52 billion to domestic semiconductor manufacturing. The CHIPS Act was enacted in January 2021 as part of the National Defense Authorization Act, but the funding part was not included. Everyone is now waiting for the House of Representatives to pass the Innovation and Competition Act, which includes the $52 billion.

Intel spent $3.5 billion to upgrade its facilities in New Mexico last year, and another $20 billion to establish two semiconductor fabs (also called “fabs”) in Arizona.

Biden applauded the company for its efforts to boost U.S. semiconductor production. Despite accounting for 47% of global semiconductor sales, the United States accounted for only about 12% of global manufacturing in 2020, he noted. Both Biden and Intel want to narrow that gap, and they hope this revelation will speed up the passage of the Innovation and Competition Act. According to The New York Times, if the bill passes, Intel CEO Patrick Gelsinger said the new factories will be built “bigger and faster.”

“Localizing a chip factory in the United States doesn’t always protect against more supply chain disruptions,” according to a Time report, because “Intel’s chips will still be moved to Asia for assembly, packaging and testing”.

The goal, according to Gelsinger, is to create and package chips “entirely on American soil” in the future, pending funding from the CHIPS for America Act. Many companies that depend on semiconductors, such as automobiles, medical devices and graphics cards, have been slowed by the continued shortages. Although PC gaming is not high on the priority list, paying a reasonable amount for the best graphics cards would be wonderful at some point.

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