Intel will invest €15 billion euros in the expansion of several chip factories in Arizona. The plan is a response to the CHIPS and Science Act. The new law unlocks more than €50 billion in subsidies for chip manufacturing and research in the United States.
Intel funds the expansion together with Brookfield Asset Management. The Canadian investment firm will contribute €15 billion for a 49 percent stake. In total, the organizations set aside €30 billion euros to expand several chip factories in Arizona.
President Joe Biden signed the US CHIPS and Science Act earlier this month. The United States wants a larger share of the world’s chip market. The new law unlocks more than €50 billion in subsidies and tax breaks for domestic chip manufacturers and researchers.
Chip factory construction projects are eligible for subsidies and tax breaks. Intel and Brookfield Asset Management make use of the new law. According to Intel CFO David Zinsner, the project “builds on the momentum from the recent passage of the CHIPS Act in the US”.
US CHIPS and Science Act
Several chip makers announced new contracts after the act was signed. Qualcomm pledged to order about €4 billion in chips from GlobalFoundries’ plant in New York. US manufacturer Micron shared an investment plan of about €40 billion for memory chip production.
Intel and Brookfield Asset Management have been discussing new US factory investments since February 2022. Last year, Intel announced multibillion-dollar investments in Europe and the United States to overcome the chip shortage at the time.
Intel’s European chip factories
The first new European factories are underway. In March 2022, Intel confirmed investments worth €33 billion in production sites in Germany, France, Ireland, Italy and Spain. A large portion of the money ends up in Germany’s Magdeburg, where Intel is building two new chip factories. According to insiders, the Italian government and Intel are on the verge of signing a €5 billion deal to build an Italian plant.
In the European Union, chip manufacturers and member states benefit from the EU Chips Act, the European equivalent of the US CHIPS and Science Act. The European Union wants a larger share of the world market too. Its strategy is similar to the United States: chip manufacturers and researchers are eligible for new subsidies and tax breaks.