Joe Biden's administration has granted Intel nearly $20 billion in grants and loans to improve their semiconductor chip output in the United States-making it the biggest amount of money the government has ever given to help semiconductor manufacturing in chip production, as first reported by Reuters.

Intel announced that the Biden administration will specifically provide up to $8.5 billion in direct funding to support Intel's semiconductor projects in Arizona, New Mexico, Ohio, and Oregon. In addition to this funding, Intel is poised to benefit from a 25% investment tax credit on over $100 billion in qualified investments and access to federal loans of up to $11 billion. 

Once combined, these financial aids amount to nearly $20 billion in support for Intel's semiconductor chip output initiatives.

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Why the Biden Administration Granted Intel $20 Billion in Semiconductor Chip Output

Commerce Department Secretary Gina Raimondo hailed the agreement as a monumental step toward producing leading-edge semiconductors within the United States. With the funding, the administration aims to decrease dependency on China and Taiwan. 

This not only addresses the looming retaliation of China against the U.S. due to their TikTok ban-it's also a way to patch up the decline in the country's global semiconductor manufacturing capacity.

Interestingly, the Biden administration's $20 billion grant to Intel for semiconductor chip output was announced in Arizona, an important political state. 

This means boosting the semiconductor manufacturing company also has implications for upcoming elections, particularly the administration's confidence in Intel as part of its broader initiative outlined in the 2022 CHIPS and Science Act.

Now, the deal was a two-way street because it's also good news for Intel, which has been struggling with uncertain demand for its chips in regular markets. 

Intel and other companies like GlobalFoundries and Microchip Technology have received significant grants. This further shows the Biden administration's goal to bring life back to the semiconductor industry.

Looking ahead, the funds allocated to Intel will support semiconductor projects across different states. At the same time, the additional funding from the Commerce Department will address the need to enhance security measures for the production of sensitive chips, especially those intended for military use. 

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