(Sharecast News) - Chip giant Intel saw shares rise strongly in pre-market trade on Wednesday after it announced the receipt of nearly $20bn from the government as part of its plans to invest more than $100bn over the next five years, creating 10,000 new jobs across four sites in the US.
In one of the biggest pubic-private investments ever made in the US semiconductor industry, the US government is putting up $8.5bn in direct funding to Intel under the CHIPS and Science Act, which aims to increase chip manufacturing and R&D.
Intel said it would received a tax break of 25% on its investments, along with federal loans of up to $11bn, related to funding its sites in Arizona, New Mexico, Ohio and Oregon.
The company said the involvement from the US Department of Commerce demonstrates the Biden Administration's "confidence in Intel's leadership" and its commitment to expanding US chipmaking capacity and capabilities.
In addition to the increase in Intel's own workforce, the projects are thought to create nearly 20,000 construction jobs, and support more than 50,000 jobs indirectly through suppliers and supporting industries, Intel said.
"Today is a defining moment for the US and Intel as we work to power the next great chapter of American semiconductor innovation," said Intel chief executive Pat Gelsinger.
"AI is supercharging the digital revolution and everything digital needs semiconductors. CHIPS Act support will help to ensure that Intel and the US stay at the forefront of the AI era as we build a resilient and sustainable semiconductor supply chain to power our nation's future."
Intel futures were rising 3.5% by 0800 ET in New York.