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Biden Is Betting Big on Intel

One of Joe Biden's campaign pitches is that he brought manufacturing jobs back to America from China. The poster child for this pitch is the Intel Corporation, which is planning to invest a staggering $100 billion in new chip-making factories in Ohio and Arizona (the latter being a key swing state, of course). Intel will get $8.5 billion in direct subsidies and $25 billion in tax breaks, which make the new plants economically viable for the company.

Construction for the Ohio plant, which will make the high-performance chips needed for AI as well as other applications, has already started. A photo of the construction site is shown below. The plant is located in Licking County, about 12 miles northeast of Columbus. The key ingredients in making chips are: (1) sand and (2) brainpower. Sand (silicon) is easy to find in lots of places, but the reason for choosing this location is its proximity to the 66,000-student Ohio State University. Ohio State is an excellent school and graduates about 2,200 engineering students per year. It may not be as good as MIT or Stanford, but they don't produce as many students per year and large tracts of land are much cheaper in the middle of Ohio than in Cambridge or Palo Alto.

Can Biden win Ohio? Probably not, but there is something else going on here. Sen. Sherrod Brown (D-OH) has a tough reelection race this year and Brown is surely going to tell the voters that he played a role in getting Intel to pick Ohio (but all the senators probably made pitches for their states, except maybe those from Alaska and Hawaii).

Intel's new chip plant in Ohio under construction

The chip factory won't be up and running for years, but as you can see above, construction is well underway, which means that many construction workers have already been hired and are at work. That alone is something Biden and Brown can use in their campaigns. Besides the jobs, the CHIPS Act has other consequences. Modern weaponry is full of advanced chips. They guide missiles of all kinds, are used in advanced drones, and much more. Being dependent on even Taiwan is a huge security problem. If China were to conquer Taiwan and stop it from exporting advanced chips, the U.S. defense industry would be up a tree. Being able to buy chips made in Ohio or Arizona would make the Pentagon much happier. Biden is highly dependent on Intel getting everything to work, but the company, which used to be #1 in the world and has slipped, is clearly motivated to get moving again and the money from the CHIPS Act that Biden signed will certainly help. (V)

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