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US: Biden celebrates new chip factories

VA few weeks ago, US President Joe Biden Signed into law $52 billion in government funding for US semiconductor manufacturing. For this he celebrated himself on Friday when he arrived at a groundbreaking ceremony for two plants of chipmaker Intel in the Midwestern state of Ohio. Biden said the new law allows for “historic investments.” Intel CEO Pat Kelsinger said the plan represents “the end of rust,” a new era in a region that was once heavily dominated by manufacturing industries such as automakers, but has lost many jobs in recent decades.

This solemn ceremony was preceded by political conflicts and aggressive lobbying. Intel Announcing the new plants in January, the scale and pace of investment in Ohio will depend on funding from Washington. The initial plan is to invest $20 billion in the site, but that could grow to $100 billion within a decade. Production is scheduled to begin by the end of 2025.

Legislation to subsidize chip manufacturing was introduced last year and quickly found bipartisan support. However, it turned out to be a political deadlock because other projects were packed into a legislative package in addition to chip manufacturing. Intel is clearly impatient. In June, The Wall Street Journal reported that the company had indefinitely postponed its planned July launch due to legal uncertainty. This was interpreted as a warning to the government. In late July, Congress then passed the “CHIPS and SCIENCE Act,” which Biden enacted a short time later.

Intel has announced massive investments in the EU this year, including chip factories in Magdeburg that will initially cost 17 billion euros. Billions of subsidies are also planned here.