Intel awarded billions through CHIPS Act

After months of waiting, the U.S. Department of Commerce awarded $8.5 billion in direct funding to Intel for commercial semiconductor projects under the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act.

Phase I of Intel’s New Albany project, the largest in the history of Ohio, is expected to create about 3,000 jobs within the company, over 7,000 union construction jobs (all under a National Construction Agreement) and an estimated 10,000 indirect jobs. According to the Ohio State Building and Construction Trades Council, Phase I will generate over 45 million work hours for members of the building trades, with the vast majority of workers being from Ohio.

An aerial view from February 2024 shows construction progress at Intel’s Ohio One campus of nearly 1,000 acres in Licking County. Affiliated members of the Columbus/Central Ohio Building and Construction Trades Council are helping build Phase I, a $20 billion project, which recently recieved a boost with the announcement of CHIPS Act funding for Intel. (Credit: Intel Corporation)

Thanks to the NCA, tradesmen and tradeswomen are guaranteed industry-standard wages with healthcare, retirement and training benefits. It will also guarantee the inclusion of local, minority-owned subcontractors and the employment of tradespeople of color, tradeswomen and veterans.

Passed in late July 2022, the CHIPS Act provides subsidies to onshore and increase semiconductor manufacturing, research and development capabilities in the U.S., especially in leading-edge semiconductors.

As part of the award, Intel has opted to secure federal loans of up to $11 billion. The company also plans to claim the U.S. Treasury Department Investment Tax Credit (ITC), which is expected to be up to 25 percent of qualified investments of more than $100 billion over five years.

While the funding was announced, it is subject to due diligence and negotiation of a long-form term sheet and award documents; plus, it is conditional on the achievement of certain milestones and subject to the availability of the funds.

The subsidies will help advance Intel’s semiconductor manufacturing and research and development construction projects at its sites in Arizona, New Mexico, Ohio and Oregon.

Dorsey Hager, C/COBCTC Executive Secretary-Treasurer

“The building trades are excited the administration is providing CHIPS money that will ensure work on the Intel project here will stay on schedule and continue long into the future,” said Columbus/Central Ohio Building and Construction Trades Council Executive Secretary-Treasurer Dorsey Hager. “We are committed to our partnership with Intel and Bechtel to train the next generation of workers and give everyone in our community the opportunity to get on the direct path to the middle class.”

Ohio State Building and Construction Trades Council Secretary-Treasurer Mike Knisley.

“The Ohio State Building and Construction Trades Council applauds this award, on behalf of the diverse union tradesmen and tradeswomen who are trained and ready to build Intel in Ohio,” said Mike Knisley, Executive-Secretary-Treasurer of the Ohio State Building and Construction Trades Council in a prepared statement. “We are proud to partner with Intel, general contractor Bechtel, and our nationally elected leaders to make domestic semiconductor manufacturing a reality in our state. Ohio’s union building tradespeople are committed to ensuring the Intel project in Central Ohio will be completed on time to bring this much-needed industry back to the United States.”

In a press release from the International Association Of Bridge, Structural, Ornamental, and Reinforcing Iron Workers, Local 172 Business Manager Robert Mullet credited the Intel project with helping the Local grow.

“Iron Workers Local 172 is currently fully employed and active at the New Albany, Ohio Intel site with 156 members,” he said. “We anticipate growing into the thousands by mid-2025 due to the CHIPS Act funding.”

Not only is Phase I creating plentiful work opportunities for affiliated members of the C/COBCTC, but it is also providing graduates of the Building and Driving Futures programs an opportunity to begin a successful career in the union construction industry.

Hager called the CHIPS and Science Act an investment to build the region’s skilled workforce. Last year, the White House named Columbus a Regional Work Hub and C/COBCTC affiliated building trades unions have been increasing their membership. Not only are they recruiting experienced construction workers from the non-union sector, but the pipeline for apprentices is increasing – thanks in part to the Building Futures Apprenticeship Readiness Program.

The legislation was viewed as crucial by Intel, who is building a semiconductor plant campus in Licking County. Construction of Phase I is underway, as the company will spend $20 billion to construct two fabs, an office building and other key infrastructure. Work on Phase I is expected to be completed in late 2026.

Additional phases of work will increase the total number of fabs constructed to eight and push the total cost to an estimated $100 billion.

In mid-March, Intel filed a progress report with the State of Ohio, which said the company has spent $1.5 billion and hired 69 workers through 2023.

Besides CHIPS and Science Act funding, Intel will also receive more than $2 billion in incentives from Ohio and New Albany.

The announcement of the CHIPS Act funding took place on March 20, as President Joe Biden traveled to Intel’s Ocotillo campus in Chandler, Ariz., to make it official.

At the event, Intel CEO Pat Gelsinger stressed that the CHIPS and Science Act will once again make America a leader in the semiconductor industry.

“By coming together today, we are saying America will not surrender our leadership to our competitors,” he said. “We are choosing innovation over inaction. We are building a future with geographically balanced supply chains right here in America.”

Gelsinger also stressed the company’s promise to be good stewards.

“We’re going to put every one of these taxpayer dollars to work, and we are committed to delivering the silicon that powers our world while driving the lowest possible environmental footprint,” he said.

President Joe Biden

Biden, who repeatedly talked about the benefits of organized labor throughout his speech, pointed out it was his administration that took the initiative and got the legislation through Congress.

“America invented these chips, and over time, some thought it was cheaper to send the manufacturing overseas because labor was cheaper,” Biden said. “As a result, when the pandemic shut down chip factories overseas, prices went up, and for the first time, Americans began to realize how important they were… I was determined to turn things around to invest in America, in all Americans – and that’s what we’ve been doing.”

Biden called the funding award through the CHIPS Act a landmark deal and a smart investment to create jobs, including union construction jobs.

“Combined, it [the Intel projects in Oregon, Arizona, New Mexico and Ohio] will create nearly 20,000 construction jobs, many of which will be union jobs,” he said.

The President also explained why he considered it a monumental moment.

“We make zero percent of the most advanced chips today,” said Biden. “Nearly all manufacturing of leading-edge chips across the entire industry moved overseas to Asia years ago. That’s why today’s investment is such a big deal. We will enable advanced semiconductor manufacturing to make a comeback in America after 40 years.”

With Intel’s funding announced, the Dept. of Commerce has now awarded CHIPS and Science Act funds to four companies.

In December 2023, the administration announced $35 million would go to BAE Systems Electronic Systems to support the modernization of the company’s Microelectronics Center in Nashua, N.H. This facility will produce chips that are essential to U.S. national security, including for use in F-35 fighter jets.

A month later, it was announced that Microchip Technology, Inc., would receive $162 million to increase its production of microcontroller units and other specialty semiconductors, and to support the modernization and expansion of fabrication facilities in Colorado Springs, Colo., and Gresham, Ore.

In February 2024, the administration announced $1.5 billion for GlobalFoundries to support the development and expansion of facilities in Malta, N.Y., and Burlington, Vt.

As reported in The Columbus Dispatch, the Commerce Department expects money to begin flowing to Intel before the end of the year after final details are worked out.