The Robert N. Boyce Building in Santa Clara, California, is the world headquarters for Intel Corporation. This photo is from Jan. 23, 2019. (Credit: Walden Kirsch/Intel Corporation)
- Claims have been made that Intel is set to recieve “staggeringly large” subsidies to the tune of 10 digits to build semiconductor fabs in the US as the company expands its foundry business and the White House prioritizes a domestic supply of chips.
- While Intel has publicly expressed support for subsidies, no commitments have been made (as of yet) and nothing has been proposed to lawmakers for approval.
- Multiple FOIA requests by Wccftech show that there are no records or documents suggesting that Intel is getting any government money. TSMC, on the other hand, is receiving support from Arizona – although this is unrelated to the CHIPS Act.
- The Semiconductor Industry Association says money isn’t available yet, as lawmakers work towards final legislation that authorizes spending.
With Intel’s NASDAQ:INTC jump back into the semiconductor foundry business via IDM 2.0, and the White House making a domestic supply of semiconductors a priority, a big question that has emerged is will the company get subsidies for building fabs in the US.
“We’re doing our part to help address this global supply crisis, but we cannot do it alone. The investment needed at the scale required is immense and it will require close industry and government partnership to address this need.” – Intel CEO, Pat Gelsinger
Intel has signaled that it’s willing to make the first move on investing in expanding its manufacturing capabilities in the US, but has called for government support in the sector. CEO Pat Gelsinger has also met with President Joe Biden in the White House to discuss the issue and hinted on being very open to the company receiving subsidies. At the same time, some publications have reported that the amount of money Intel is receiving is “staggeringly large” and in the “10 digits.”
So Where Does The Truth Lie?
This time, with Intel. While CEO Pat Gelsinger has met with President Joe Biden, as of this moment, there are no formal legislative proposals for money directed towards Intel. Although the company has received a number of prior subsidies and grants from varying levels of government in its 52-years of existence, it hasn’t received any money from the feds or at a state level to build fabs under the CHIPS for America Act or any other recent plan.
When asked for comment, Intel pointed to recent comments by Gelsinger, who recently wrote:
“Other nations’ governments have aggressively promoted the development of semiconductor manufacturing. That’s why a major program of federal government incentives for the U.S. semiconductor industry is essential. In the process, we can grow our economy, strengthen our national security and our supply chains and cultivate the skills required to renew this strategically important engineering and innovation ecosystem. Intel is also a substantial contributor to the U.S. economy, accounting for hundreds of billions of dollars in direct and indirect contribution to the U.S. economy in recent years, according to our new economic impact report.” – Intel CEO Pat Gelsinger
To research the validity of claims that Intel is all set to receive a whopper of a taxpayer check to move dirt to make way for fabs, Wccftech ran a number of Freedom of Information requests (a mechanism that allows you to search through bureaucrats’ emails, or through other government documents) to see if the pencil pushers in DC had been talking about this and mapping out potential fund disbursement to the company. If something was officially in the works, and a proposal was being drafted to be attached to a bill to be presented to Congress to authorize spending, something would come up in these requests.
And there was nothing.
A search through the White House’s Office of Science and Technology Policy, which advises the President on related scientific and technological policy developments, turned up no responsive documents.
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2021.04.09_21-067_Final_Response_EX by Sam Reynolds on Scribd
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Another FOI sent to the National Institute of Standards and Technology, which has been directed to create a “Manufacturing USA institute focused on developing advanced testing, assembly, and packaging capabilities for semiconductors,” came back with nothing either. Effectively, NIST is one of the quarterbacks that’s overseeing the efforts between the public and private sector to build up America’s semiconductor manufacturing capabilities. If there were discussions about subsidies for Intel’s fabs, they would be occurring at NIST.
The Economic Development Administration, which is in charge of facilitating economic development and job creation through private and public partnerships as well as stimulus, did not have any records either.
TSMC Is Receiving Grants (Unrelated To The CHIPS Act) In Arizona, Confirms Arizona Commerce Authority, But Nothing For Intel Yet
Both the Biden and Trump White Houses have been pushing for semiconductor supply chain security, in order to bolster American competitiveness in a business that’s clustered in Asia. The tens of thousands of jobs created by a large semiconductor fab are enticing for any politician, which is why Arizona has enticed Taiwan Semiconductor Manufacturing Corporation (TPE:2330) to set up shop in the state with lucrative tax credits and subsidies.
As part of an FOI request to the Arizona Commerce Authority, Patrick Ptak, its Senior Vice President, confirmed that Intel has not received any subsidies or incentives from the state for the 2020 fiscal year and is currently not in the process of applying for one for the 2021 year.
TSMC has, Ptak said, but the details have not been publicly released. When TSMC’s deal with Arizona was first announced, Wccftech’s attempts to get details via a FOI were rebuffed. The Commerce Authority isn’t subject to the same FOI disclosure requirements as other agencies, which critics have identified as problematic.
Ptak said that should Intel apply for the subsidy program, officially called the Qualified Facility Tax Credit, it would be eligible for a maximum of $90,000,000, paid out as tax credits per employee, depending on the number of jobs created.
Intel Has Gotten Plenty of Subsidies, Years Ago
All this isn’t to say that Intel hasn’t ever received subsidies. According to the corporate subsidy tracker from Good Jobs First, Intel has received a total of $6,004,762,638 in subsidies (paid out mostly at the state level) since 1993 and $141,855,000 in federal loans.
In fact, Intel has received plenty of subsidies to build fabs during its 52 years in business. In 2014 tracker shows the company received a tax package rebate worth $100 billion over 30 years from Oregon, with an additional $2 billion in cash subsidies. Likewise, in 2004, Intel received another $2 billion package from New Mexico.
The most recent subsidies Intel has received were for $11.6 million during the 2019 fiscal year to be used for job creation at its Chandler, Arizona campus. These were also under the Qualified Facility Tax Credit program.
Semiconductor Industry Association: Money Isn’t Ready Yet
The Semiconductor Industry Association, big silicon’s lobby group in DC, has been busy proposing to lawmakers how its members might be able to spend money on building semiconductor manufacturing capabilities and creating jobs in-country should funds become available. But none of this is to say that Intel is specifically getting a “staggering” amount of money.
A Boston Consulting Group report commissioned by the SIA found that $50 billion by the government over 10 years would create as many as 19 major fabs, and 70,000 direct jobs in the US over the next 10 years.
Dan Rosso, a spokesperson for the SIA, told Wccftech that while the Chips for America Act “authorizes” federal investments in domestic chip manufacturing incentives and investments in chip research the funding hasn’t been made available by lawmakers. Getting the funds available is something the SIA is working on, says Rosso.
“No companies have received funds because funding has not yet been provided. That’s what we’re pushing for now,” he told Wccftech.
There Isn’t Any Money For Intel In The Pipeline Right Now — Although That Could Change In The Future
The difference between being semi-accurate and accurate is understanding the nuance in money that Intel has formally applied for, funds a lobbyist believes Intel might be able to get, and Intel might theoretically receive should legislation pass and funds become available.
Although Intel’s CEO has met with President Biden, there’s a long way to go before an official plan is presented to Congress. Considering the size of investment in the semiconductor industry, one could also make an educated guess that any subsidy received would not be a small amount and could easily be in the “10 digits”.
But the fact of the matter is – that right now there are no formal discussions within the government about Intel receiving federal subsidies. There aren’t emails going between bureaucrats discussing it because it hasn’t gotten to a theoretical level, even as the US government becomes keenly aware of the need to invest in semiconductor infrastructure. Intel has not applied for funding from the state of Arizona for new semiconductor facilities for its IDM 2.0 plan, and anything publicly available from the SIA says nothing about requesting funds specifically earmarked for Intel.
It is worth noting that the CHIPS act legislation in the NDAA hasn’t been funded yet and President Biden’s infrastructure proposal hasn’t been passed yet – and no companies will receive any funding before that happens.
Somewhere, someone might have crafted a plan that proposes applying for a subsidy — but it’s far from anything official and hasn’t been keyed into the machinery yet.
There’s also the question as to what extent will subsidies be approved as funds earmarked for specific companies are sure to be revised as bills snake their way through Congress.
Until publicly available information suggests otherwise, the statement that Intel is all set to get a 10-figure check from US taxpayers to build fabs simply isn’t true. Wccftech has looked high and low, and there’s no evidence to suggest that this is the case right now – although with Intel actively vying for government support – this could change in the future.
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