Intel: CHIPS Act Has Not Met Expectations, Despite $30 Billion in Investments

About the CHIPS Act

In recent years, the US government has been actively promoting the CHIPS Act, aimed at stimulating semiconductor production within the country. The CHIPS (Creating Helpful Incentives to Produce Semiconductors) Act was passed in 2022 as a response to the growing dependence of the US on microchip imports and the global shortage that has been exacerbated by the COVID-19 pandemic.

Emphasis on Local Production

In recent years, Intel has been actively expanding its domestic production in an effort to reduce the country’s dependence on foreign suppliers. The company has invested about $30 billion in the modernization of existing facilities and the construction of new ones to strengthen the US position in the global microchip market.

The CHIPS Act: Expectations and Reality

When the CHIPS Act was enacted in 2022, Intel, like many other industry players, anticipated substantial government support through subsidies and tax incentives. This assistance was expected to accelerate the construction of new production facilities and foster innovation. However, two years later, the company reported that it had not received any significant financial aid. Intel was projected to secure $8.5 billion in direct investment and up to $11 billion in loans, along with a 25% tax credit, but no direct investment has materialized.

Complicated application processes and bureaucratic delays have hindered project launches. Intel representatives stress that these challenges jeopardize their plans for expanding domestic production and meeting their targets to boost the US share of the microchip market.

Problems and Prospects

Intel notes that if the current pace of CHIPS Act implementation continues, the growth of domestic production may fall short of expectations. This, in turn, may increase pressure from competitors such as TSMC and Samsung, which receive significant government subsidies in their countries.

To improve the situation, the company suggests simplifying the application and approval procedures, as well as improving coordination between private companies and government agencies.