Intel Corp. (NASDAQ:INTC) shares jumped over 3% premarket after the Joe Biden-led administration proposed a non-binding preliminary memorandum of terms (PMT) with the tech giant to provide up to $8.5 billion in direct funding as part of the CHIPS and Science Act.
What Happened: The proposed funding is set to support multiple projects in Arizona, New Mexico, Ohio, and Oregon, according to an announcement by the U.S. Department of Commerce on Wednesday.
The investment is expected to create tens of thousands of jobs and reinforce the U.S.’s position in the global semiconductor market.
Intel’s investments in the U.S. over the next five years are projected to surpass $100 billion, leading to the creation of over 10,000 manufacturing jobs and nearly 20,000 construction jobs.
This, combined with the Biden administration’s proposed CHIPS investment, would mark one of the largest investments in U.S. semiconductor manufacturing.
U.S. Secretary of Commerce Gina Raimondo said, “This announcement is the culmination of years of work by President Biden and bipartisan efforts in Congress to ensure that the leading-edge chips we need to secure our economic and national security are made in the U.S.”
Intel CEO Pat Gelsinger added, “CHIPS Act support will help to ensure that Intel and the U.S. stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation’s future.”
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This comes at a time when Nvidia Corp. (NASDAQ:NVDA) is reportedly looking at Intel Foundry to produce its AI chips.
Why It Matters: The proposed investment in Intel is part of the Biden administration’s broader efforts to boost domestic semiconductor production.
The Biden administration is also expected to grant $6 billion to Samsung, and $5 billion to TSMC to expand their chipmaking operations in the U.S.
Price Action: At the time of writing, Intel stock was up 3.76% in premarket compared to the closing price of $42.05 on Tuesday, according to Benzinga Pro.
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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.
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