U.S. Sen. Sherrod Brown announces almost $20 billion for Intel fabs in Ohio, around U.S.

NEW ALBANY, OH — SEPTEMBER 09: U.S. Senator Sherrod Brown speaks at a groundbreaking ceremony for Intel’s new semiconductor manufacturing site, September 9, 2022, in Licking County, Ohio. (Photo by Graham Stokes for the Ohio Capital Journal / Republish photo only with original story)

Nearly $20 billion in federal grants and loans is on its way to Intel to support work on semiconductor fabs in Ohio and around the country. The funding is part of the CHIPS Act, signed into law by President Joe Biden in 2022. Ohio’s New Albany-area Intel facility currently under construction stands to benefit substantially.

During a call with reporters Wednesday, U.S. Sen. Sherrod Brown took a victory lap, stressing the project’s impact on skilled trades workers in the state.

“There’s never been a construction project like this in the Midwest,” Brown said, “maybe in the country — work for 7,000 union workers in the skilled trades over 10 years, 3,000 workers in Intel’s fabs.”

Silicon Heartland

Intel announced plans for the facility, dubbed Silicon Heartland , in early 2022. The state of Ohio has so far handed the company $723 million in grants to spur that development. But from the outset, Intel officials insisted federal assistance would be necessary to maximize the project.

Enter the CHIPS Act.

“The goal was to stop Ohio manufacturers from having to be dependent on long, long supply chains overseas for these chips,” Brown described, “and to make the U.S. and Ohio the global leader in semiconductor innovation and production, which we knew we could be.”

Ohio Chamber of Commerce President Steve Stivers said the CHIPS Act’s passage may be the beginning of a virtuous cycle.

“We’ve heard a lot more from other manufacturing companies that want to re-shore their manufacturing as a result of the fact that we’re going to have chips made in Ohio,” he said. “It’s a big deal.”

NEW ALBANY, OH — SEPTEMBER 09: Intel CEO Pat Gelsinger, Gov. Mike DeWine joined by politicians and business leaders break ground ceremony for Intel’s new semiconductor manufacturing site, September 9, 2022, in Licking County, Ohio. (Photo by Graham Stokes for the Ohio Capital Journal / Republish photo only with original story)

The measure set aside more than $50 billion for efforts like promoting high-tech manufacturing. Wednesday’s announcement represents the biggest funding commitment under the law so far. In addition to Ohio’s fab, Intel facilities in Arizona, New Mexico and Oregon will benefit from the $8.5 billion in grant funding. The agreement also provides Intel an $11 billion credit line through the U.S. Department of Commerce . Allen Thompson from Intel explained the $39 billion of the CHIPS Act’s $52.7 billion appropriation was set aside for manufacturing incentives.

“I’m pretty certain we got the largest chip grant in the country,” he explained, “and I can tell you a good portion of those funds will be coming to Ohio.”

Because the details are still part of a preliminary memorandum of terms, Thompson explained, the exact breakdown of funding between projects is not yet clear. The CHIPS office has not made the PMT public because it contains confidential business information. However, Thompson said Ohio’s share would likely be “in the billions.”

The $11 billion in loans Intel can access comes from a separate, $75 billion loan authority established under the CHIPS Act.

Setbacks

While the funding announcement is doubtless good news for the chip maker, it comes on the heels of reported delays . Instead of having Ohio’s fab up and running by the end of 2025, Intel now expects to complete construction in late 2026 . According to reporting in the Wall Street Journal, the slow roll out of grants like the one announced Wednesday was part of the problem .

To Mike Knisley, secretary-treasurer for the Ohio Building and Construction Trades Council, the project is worth the wait. He reiterated an argument he’s made before , that Intel’s fabs will establish an employment pipeline spanning multiple generations. Knisley also argued the sheer scope of the project can be hard to fathom.

“45 million work hours just on the first phase alone,” he said, “That is gold.”

Brown downplayed the delays, arguing that, for projects as big the new microchip facility, setbacks are part of the bargain.

“We always knew this wasn’t going to just be quick and easy,” he said, “that this was always going to be a challenge. This is the most complicated, complex building project that anybody’s ever done in Ohio.”

While the company and the federal officials have agreed to terms under the preliminary agreement, the Commerce Department is still completing a due diligence review. In its press release the Department notes the final funding figures in the agreement could change.

Follow OCJ Reporter Nick Evans on Twitter.

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