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Biden to Announce Multibillion-Dollar Grant for Intel to Expand Chip Production

TechBiden to Announce Multibillion-Dollar Grant for Intel to Expand Chip Production

President Biden will issue a multibillion-dollar award to Intel on Wednesday to expand its chip production in the United States, people familiar with the decision said, as the president champions his economic policies during a tour of the Southwest.

The announcement in Phoenix, Ariz., is a major award from Mr. Biden’s $39 billion CHIPS and Science Act, which is aimed at building up the U.S. semiconductor industry and reducing reliance on technology made in East Asia.

Mr. Biden has made expanding the production of the chips, which are used in all types of technologies, a central focus of both efforts to compete with China and bolster domestic manufacturing.

White House officials have provided few details about the award for Intel, but an official who spoke on the condition of anonymity to discuss the grant said it would be the first for several chip makers, including Samsung, Micron and the Taiwan Semiconductor Manufacturing Company.

The White House is hoping to speed up the implementation of its semiconductor investments, but some of the companies have run into obstacles. T.S.M.C. pushed back initial manufacturing at its first Arizona factory to 2025 from this year, saying local workers lacked expertise in installing some sophisticated equipment.

Biden administration officials have also emphasized the need to ramp up apprenticeship programs to prepare a work force that can fill factories in places like Arizona or Texas.

The money is enormously important to Intel and Patrick Gelsinger, who returned as chief executive to the company three years ago and took on the twin missions of restoring Intel’s technology lead in manufacturing and the U.S. position in global chip production.

The company’s microprocessor chips, which provide calculating power to most of the world’s computers, are regularly enhanced by progress at Intel factories in shrinking transistors to pack more of those tiny switches on each piece of silicon. But Intel stumbled in the past decade delivering new generations of manufacturing technology, allowing T.S.M.C. and Samsung to start building more advanced chips.

Mr. Gelsinger responded with an ambitious plan to introduce five new production processes in four years, along with a radical change in Intel’s business model. The company, which for decades reserved its factories to produce the chips it designs and sells, is now competing with T.S.M.C. and Samsung in the so-called foundry business of manufacturing chips designed by others.

He also started a costly expansion campaign that includes new or upgraded factories in Arizona, Ohio, New Mexico, Ireland, Israel and Germany. Mr. Gelsinger, perhaps the most vocal industry advocate for the CHIPS Act, did not wait for money from the Commerce Department before starting those construction projects.

But he has seemed impatient with the department’s pace in handing out subsidies, an effort that has required complex negotiations between companies and new specialists the government has hired.

“We haven’t announced our CHIPS grant yet,” said Mr. Gelsinger, speaking at a company event in February along with Gina Raimondo, the commerce secretary, who attended by video link. “Yeah, very soon, right?” he asked.

The company, whose business has been hurt by a post-pandemic slowdown in sales of computers that use its chips, has used debt financing and other tactics to help finance the expansion. But Mr. Gelsinger has made it clear that he has faced pressure from Intel board members to justify expenditures on the new factories, which fabricate chips on silicon wafers and may cost $10 billion to $20 billion each.

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