Ohio is giving Intel $2 billion in incentives to build a chip plant in the state

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The ongoing chip shortage we have faced over the past year, or more has affected several tech companies and disrupted the market. These chips are used in everything from smartphones to televisions, and the shortage has caused some goods to be delayed. Ohio hopes to be part of an American solution by offering Intel $2 billion in incentives to build an Ohio-based chip factory.

Estimated reading time: 2 minutes

Ohio officials hope that a new $20 billion chip-making facility will help with the chip shortage and create a new tech hub in the Midwest. Ohio’s state development director said, “that the combination of tax breaks and incentives are likely the largest ever offered by Ohio for what state leaders say is the biggest economic development deal in its history.”

Santa Clara, California-based Intel, the world’s second biggest chipmaker, announced a week ago it had selected a site outside Columbus for two new chip manufacturing facilities.

The complex could grow much larger and more quickly, Intel executives said, if Congress approves a $52 billion bill that would invest in the chip sector and help ensure more production in the U.S.

Shortages of computer chips, which are mostly made in Asia and used in everything from handheld video games to automobiles, have become a growing concern and were exposed in the U.S. and Europe during the pandemic.

The U.S. share of the worldwide chip manufacturing market has declined from 37% in 1990 to 12% today, according to the Semiconductor Industry Association.

Intel wants to move quickly on the Ohio plants, which will support its own line of processors and build chips designed by other firms. Construction is expected to begin this year, with production coming online at the end of 2025.

Ohio’s offer includes $600 million to help Intel offset the cost of building the factories, which is more expensive than it would be in Asia, said Lydia Mihalik, the state’s development director.

The state also will pay nearly $700 million for roadwork and water infrastructure upgrades, including a system that will allow the plant to reuse wastewater.

APNews

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Last Updated on January 29, 2022.

intel chip shortage
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