Intel to Receive $8.5B in Federal Funds for Semiconductor Projects
Another $11 billion in loans could be available for new developments and facility expansions.
Intel could receive up to $8.5 billion in federal funds. The firm signed a preliminary memorandum of terms with the U.S. Department of Commerce for direct financing through the CHIPS and Science Act. Proceeds will go toward the development and expansion of semiconductor projects in Arizona, New Mexico, Ohio and Oregon.
The company also intends to claim the U.S. Treasury Department’s Investment Tax Credit—to reach up to 25 percent of investments of more than $100 billion over five years. In addition, the signed memorandum grants Intel the option to obtain federal loans of up to $11 billion.
The projects in the financing plan include two manufacturing sites in Arizona and Ohio, as well as a packaging facility in New Mexico and an R&D location in Oregon. Together, the facilities are slated to generate some 10,000 company jobs, 20,000 construction jobs, as well as 50,000 indirect jobs within supporting industries. The developments will facilitate the emerging AI sector, but will also support other industries such as automotive, medical device and aerospace.
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The Ohio plant spans 1,000 acres in Albany, Licking County, marking the largest private-sector investment in the state’s history. It broke ground in 2022 and Intel expects to start production by 2025. The Arizona project includes the development of two new factories totaling 670,000 square feet, along with the modernization of an existing one. It is taking shape in the city of Chandler and has also set records within its state.
The New Mexico project is in Rio Rancho and involves the redevelopment of two fabs into advanced packaging facilities, where chips will be assembled. Upon completion, these facilities will be the largest for this purpose in the U.S. Finally, the development in Hillsboro, Ore., will focus on expanding and modernizing existing facilities and utilizing advanced lithography equipment.
Chip manufacturing drives industrial development
Recently, GlobalFoundries announced it will invest $12 billion in expanding an existing semiconductor manufacturing site in Saratoga County, N.Y. The project is also supported through the CHIPS and Sciences Act with the U.S. Department of Commerce providing $1.5 billion in direct funding. The expansion is slated to create more than 1,500 direct jobs.
The CHIPS Act has boosted industrial owners and developers’ confidence in the sector over the past several years. The main challenges for this growth are access to skilled labor and sufficient energy, according to industrial sector experts interviewed by Commercial Property Executive at the beginning of the year.
New chip manufacturing facilities might breathe new life into the sector, driving new construction and demand for more advanced properties. In 2023, developers broke ground on 314.6 million square feet of industrial space nationally, a decrease of more than 40 percent compared to either of the two previous years, according to a recent CommercialEdge report. Vacancy has also ticked up slightly, clocking in at 4.8 percent as of January, up 80 basis points over 12 months, as demand moderated.
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