COLUMBUS, Ohio (WCMH) — The Ohio Department of Development said it has established an official onshoring agreement with Intel for $600 million in grants.
The agreement, announced Friday, was more than a year in the making. Jointly, the state and Intel announced its $20 billion dollar project to build a “mega-site” of semiconductor fabrication plants in central Ohio in January 2022. It came with promises — on the state’s part — of more than $1 billion in incentives for the tech giant.
A year and a half later, as construction crews in western Licking County cleared land and laid concrete, Intel and Ohio have now officially inked an agreement on the terms that at least $600 million in grants will be disbursed under.
NBC4 reported last week that onshoring agreement had yet to be finished. At the time, a spokesperson for the development department said its team was working to do so and that the state had not dealt with a project of similar size before.
In an email statement Monday, a spokesperson for Intel said it was proud of the progress being made on its facilities.
“Intel is grateful for our partnerships with the state of Ohio, Licking County, city of New Albany, and the local community as we continue to build an Intel future in the Silicon Heartland,” the spokesperson wrote.
What’s in the agreement?
The agreement deals with a $600 million already-announced grant. Equal halves of the grant will be used to build one semiconductor fabrication facility. Intel initially plans to construct two at its New Albany mega-plant.
Intel will receive that money “no more than two years following the commencement of construction of each fab,” according to the grant agreement document. With all the pomp and circumstance of its September groundbreaking event, Intel actually kicked off construction last July, meaning the grant funding will be doled out by mid-2024 at the latest.
The effective date on the contract is listed as June 14, 2022.
The agreement does not address money the state said it would give Intel for a water reclamation facility, or any other forms of aid being offered — including eventual tax credits Intel could benefit from through job creation. Intel signed another contract with the state regarding that Job Creation Tax Credit in October and it shares some similarities with the onshoring one.
Between those two agreements, Intel will be required to start filing annual performance reports and economic impact reports in 2024.
The state gives Intel until Dec. 31, 2028, to finish its construction on the two fabs before it would face grant-related penalties. But before that deadline, if Intel has to delay its construction schedule, it has to give the state at least one year of notice.
Other clawbacks exist within the agreement, too. If the state informs Intel it has failed “to perform any of its obligations under this agreement” and Intel doesn’t seek to remedy them, the state can seek its grant money back.
Some of those clawbacks are determined by market conditions. including whether Intel receives CHIPS Act funding from the federal government. As of June 20, the federal office overseeing CHIPS Act funding was still reviewing applications for its first round of funding, announced in February.
