Intel CEO Patrick Gelsinger was the industry's leading lobbyist for the funding. David Paul Morris/Bloomberg via Getty Images
The U.S. plans to announce large chip subsidies by the end of March, people familiar with the plans said. This paves the way for billions of dollars to be sent to semiconductor manufacturers to boost domestic production.
The awards given to Intel Corp. and other chipmakers to leave are a central part of the 2022 Chips and Science Act, which includes $39 billion in direct grants to revive U.S. manufacturing.
Intel has said the grants will determine how quickly expansion projects move forward, including a planned plant in Ohio that will be the largest in the world. Foreign chipmakers such as Taiwan Semiconductor Manufacturing Co. and Samsung Electronics Co. are also expected to receive some of the funds to help them finance factories in the United States.
The money has been slow to flow out, with only two small grants announced more than a year after Biden signed the landmark initiative. The effort, aimed at rebalancing what Washington sees as a dangerous concentration of manufacturing in East Asia, is a key pillar of Biden's economic message ahead of the November election. It promises thousands of good-paying factory jobs in new manufacturing centers across the country.
The timing suggests the awards may be presented before President Joe Biden's State of the Union address on March 7. Spokespeople for the White House and Intel declined to comment.
Commerce Secretary Gina Raimondo said her agency plans to hand out about a dozen awards this year, including several billion-dollar grants to support advanced chip-making facilities. The grants, which could take the form of a combination of grants, loans and loan guarantees, will cover up to 15% of the project costs. The Commerce Department declined to comment.
For chipmakers, the payouts will help cushion the financial impact of building facilities that can cost up to $30 billion and still be obsolete within a decade. Semiconductor companies have pledged to invest more than $230 billion in the U.S. in recent years, many on the express condition that they receive government support.
Intel CEO Pat Gelsinger was the industry's leading lobbyist for this funding. His company, once the world's largest chipmaker, has fallen behind competitors and a construction boom is part of Gelsinger's comeback plan.
Intel is building or planning factories in Arizona and Ohio as well as a new location in Germany – where the CEO is counting on European support.
TSMC, the world's largest chipmaker, plans to spend $40 billion to build two manufacturing facilities in Arizona. However, the company has delayed the start of production at both locations due to labor and cost issues at the first location. It was recently said that US incentives will help determine how advanced the technology will be at the second plant.
The projects in Arizona and Ohio carry significant electoral weight: Biden won the first state in 2020 by just 10,000 votes, and manufacturing will be a central issue in a key Senate race in Ohio.
Meanwhile, governments around the world are pushing ahead with their own chip programs. Several have signed agreements with the biggest names in the industry, promising to cover up to half the construction costs.
The Wall Street Journal reported earlier Sunday that grants to build new factories may arrive in the coming weeks.