Intel announced the start of work on a massive $20 billion semiconductor plant. The plant comes up in Ohio, where US President Joe Biden and Ohio Governor Mike DeWine joined the breaking ground ceremony.
The Biden administration has been making a renewed push into the chip making industry. In a big boost to the semiconductor industry, the US Senate voted in July to move forward with the CHIPS Act that will provide a $54 billion boost to the sector. The long-delayed Senate vote fulfills the chip industry's demand for subsidies that will enable it to compete with China.
Intel had earlier announced it would invest $100 billion in Ohio over the next 10 years. "Today marks a pivotal moment in the journey to build a more geographically balanced and resilient semiconductor supply chain," Intel CEO Pat Gelsinger said.
"The establishment of the Silicon Heartland is testament to the power of government incentives to unlock private investment, create thousands of high-paying jobs, and benefit U.S. economic and national security," the CEO's statement added, according to IANS.
At the outset, the semiconductor manufacturing site will generate 7,000 construction jobs and more than 3,000 manufacturing and engineering positions, the report says.
The government push announced in July includes $54 billion in subsidies for America semiconductor companies and a four-year 25 percent tax credit, which is worth about $24 billion.
The US Commerce Secretary had repeatedly warned earlier that chipmakers will leave the country and set up manufacturing bases overseas unless the key bill authorising spending for the industry was passed soon.
Gina Raimondo said at Davos in May that the semiconductor giants are frustrated by the slow legislative process over a bill that seeks spending of over $50 billion on semiconductor manufacturing.
The US has had clear dominance in the semiconductor industry in the last several decades, maintaining more than 50 percent of the market share in revenue terms at one point. The country was also home to more than half of the 15 largest semiconductor companies in the world. But that dominance is being chipped away, with China and Taiwan expanding their footprint in the industry.
It was reported in March last year that the Chinese state investment fund was boosting the firepower of its all-important chipmaker SMIC amid a high-stakes 'chip war' with the United States. China's Semiconductor Manufacturing International Corp said it will build a $2.35 billion plant with funding from the provincial government of Shenzhen.