Competition with China

Biden wants to butter up Intel with 20 billion dollars

The money will be used to support the construction and expansion of Intel plants in the south-western US state of Arizona as well as in New Mexico, Ohio and Oregon.

(Bild: 2018 Getty Images)

US President Joe Biden wants to support the US chip manufacturer Intel in its competition with Chinese producers with state aid amounting to almost 20 billion dollars (around 18 billion euros). The package consists of 8.5 billion dollars in non-repayable subsidies and 11 billion dollars in loans, as the White House announced on Wednesday.

This is the largest financial injection for a company ever approved by the Biden administration. The funds will be used to support the construction and expansion of Intel facilities in the southwestern US state of Arizona as well as in New Mexico, Ohio and Oregon, the government headquarters explained. These projects are expected to create almost 30,000 new jobs.

Arizona is considered one of the key states for the outcome of the presidential election in November, in which Democrat Biden is expected to face Republican Donald Trump again. In the 2020 election, Biden won Arizona by a very narrow margin against the then incumbent Trump.

From zero to twenty in six years
The government aid is intended to enable Intel to initiate investments worth more than 100 billion dollars, as US Secretary of Commerce Gina Raimondo explained. This will be one of the largest investments in the US semiconductor sector to date. The aim is for 20 percent of global production of the latest generation of microchips to come from the USA by 2030.

Currently, the US share of these state-of-the-art chips is zero percent, said Raimondo. The USA has so far been dependent on "a small number of factories in Asia" for this type of chip. This is not only an economic problem, but also one of "national security", emphasized the minister.