The Biden administration is set to provide Intel with nearly $20 billion in grants and loans to boost domestic production.

In a significant boost to the U.S. semiconductor industry, Intel Corporation (INTC) is set to receive nearly $20 billion in grants and loans from the Biden administration to enhance domestic chip production and reduce reliance on foreign manufacturers. After the announcement, Intel’s stock price surged over 4% in premarket trading.

Intel to Receive Nearly $20 Billion in Grants and Loans to Boost US Domestic Chip Production

Intel Corporation is set to receive nearly $20 billion in grants and loans from the Biden administration to boost domestic semiconductor chip production.

The funding, which includes $8.5 billion in grants and up to $11 billion in loans, is part of the larger $52.7 billion allocated by the 2022 CHIPS and Science Act to enhance U.S. semiconductor output. The act includes $39 billion in production subsidies and $11 billion for research and development.

The funding aims to reduce the U.S.’s reliance on China and Taiwan for semiconductor manufacturing, as the U.S.’s global share has dropped from 37% in 1990 to 12% in 2020. Intel plans to use the funds to construct two new factories and modernize an existing one in Arizona.

In addition to the $20 billion, Intel is expected to receive up to $3.5 billion from the Commerce Department to enhance security at its Arizona facilities for producing chips for military use.

Intel Stock Up Nearly 4% in Premarket Trading

Intel Corporation stock closed at $42.05 on Tuesday, a decrease of $0.66 (-1.55%) from the previous close of $42.71. In pre-market trading, the stock price increased by $1.65 (+3.92%) to $43.70 at the time of writing.

Over the past 52 weeks, Intel’s stock has traded between $26.86 and $51.28. The trading volume for the day was 34,477,528 shares, lower than the average volume of 44,156,490 shares.

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