AGS NEWS – Intel (INTC.O) is set to embark on a massive spending spree totaling $100 billion across four U.S. states to construct and expand factories.

This move follows the acquisition of $19.5 billion in federal grants and loans, with hopes to secure an additional $25 billion in tax breaks.

The cornerstone of Intel’s five-year investment strategy involves transforming vacant land near Columbus, Ohio, into what CEO Pat Gelsinger described as “the largest AI chip manufacturing site in the world,” slated to commence by 2027.

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The U.S. government announced the allocation of federal funds to Intel under the CHIPS Act on Wednesday.

In addition to the Ohio project, Intel plans to revamp facilities in New Mexico and Oregon, and bolster operations in Arizona, where rival Taiwan Semiconductor Manufacturing Co (2330.TW) is also establishing a significant factory.

This substantial funding marks a crucial opportunity for Intel to restore its competitiveness in semiconductor manufacturing, following a decline in market share to competitors like TSMC.

Gelsinger, who announced a strategic plan in 2021 to reclaim Intel’s leading position, emphasized the necessity of government support for the plan’s profitability.

With government assistance secured, Intel is prepared to commence its ambitious investment strategy.

Gelsinger outlined that a significant portion of the $100 billion will be allocated to construction costs, with the remainder designated for procuring chipmaking equipment from various suppliers.

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Despite the infusion of funds, analysts caution that Intel’s resurgence in the foundry market may take several years.

While the federal backing provides a substantial boost, Intel must demonstrate its ability to compete with Taiwanese and Korean rivals in the near term.