Hungry for votes, so Joe Biden hands out $30bn on chips

The Biden administration’s biggest investment in the domestic chip-making sector as it takes on China.

Joe Biden with union members at Intel's Ocotillo Campus in Chandler, Arizona, on Wednesday. Picture: AFP

Joe Biden has ­unveiled almost $US20bn ($30.2bn) in grants and loans for Intel’s domestic chip-making plants – his administration’s biggest investment in the sector as he takes on China and sells his economic achievements to the American public.

The US President’s decision to make the announcement during a trip to Arizona underscores his strategy of highlighting legislative achievements in key battleground states ahead of ­November’s presidential rematch against Donald Trump.

“Unlike my predecessor, I was determined to turn things around to invest in America – all-American, all Americans. And that’s what we’ve been doing,” Mr Biden said at the Intel campus in Chandler, Arizona.

Mr Biden said the investment in Intel facilities in four states – Arizona, Ohio, New Mexico and Oregon – would put the US on track to manufacture 20 per cent of the world’s leading-edge chips by the end of the decade.

He then took a further dig at Mr Trump, saying that “my predecessor would let the future rebuild in China and other countries, not America, because it may be cheaper”.

Southwestern Arizona was one of the tightest races of 2020, with Mr Biden winning by just 10,457 votes – and the President will likely need to win it again in 2024.

The White House said the deal with Intel would provide up to $US8.5bn in direct funding along with $US11bn in loans under the CHIPS and Science Act. The $US8.5bn is the largest of any grant made so far under the $US52.7bn 2022 legislation, US Commerce Secretary Gina Raimondo said ahead of the ­announcement.

The money will help encourage Intel to make more than $US100bn worth of investments, which will be one of the largest investments ever in US semiconductor manufacturing, she said.

“We rely on a very small number of factories in Asia for all of our most sophisticated chips. That’s untenable and unacceptable,” she said. “It’s an economic security problem. It’s a national security problem. And we’re going to change that.”

Intel also plans to claim the US Treasury Department’s ­Investment Tax Credit of up to 25 per cent on some capital expenditures, according to the White House, which would significantly increase the amount of financial support it receives from the US government. The tax ­credit is linked to a separate Biden administration policy – also adopted in 2022 – called the Inflation Reduction Act.

AFP