USA: Biden celebrates new chip factories

VA few weeks ago, the American President Joe Biden signed legislation providing $52 billion in government funding for US semiconductor production. For this he celebrated himself on Friday when he came to the ground-breaking ceremony for two plants of the chip manufacturer Intel in the state of Ohio in the Midwest of the country. The new law allows for "historic investments," Biden said. Intel CEO Pat Gelsinger said the project marks the "end of the rust belt," heralding 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.

The solemn ceremony was preceded by a great deal of political wrangling and aggressive lobbying. intel announced the new plants in January, saying even then the size and speed of investment in Ohio would depend on funding from Washington. The initial plan is to invest $20 billion in the site, but this could grow to $100 billion within a decade. Production is scheduled to start in late 2025.

The law to subsidize chip production was introduced last year and quickly found support from both parties. Nevertheless, it turned into a political stalemate, partly because other projects were packed into a legislative package in addition to chip production. Intel was apparently getting impatient. In June, the Wall Street Journal wrote that the company had indefinitely postponed the groundbreaking, initially scheduled for July, due to uncertainty about the law. This was interpreted as a warning shot to the government. At the end of July, Congress then passed the “Chips and Science Act”, and a little later Biden signed it into force.

Intel has also announced massive investments in the EU this year, including chip factories in Magdeburg, for which 17 billion euros will initially be spent. Billions in subsidies are also planned here.

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