President Biden will give Intel a multibillion-dollar award on Wednesday to expand its chip production in the United States, people familiar with the decision said, as the president defends his economic policies during a tour of the Southwest.

The announcement in Phoenix, Arizona, is a major distinction from Mr. Biden’s $39 billion CHIPS and Science Act, which aims to build the U.S. semiconductor industry and reduce dependence on technology from East Asia.

Mr. Biden has made expanding production of chips, used in a variety of technologies, a central focus of both efforts to compete with China and boost domestic manufacturing.

White House officials have provided few details about the award for Intel, but an official who spoke on condition of anonymity to discuss the grant said it would be the first for several chip makers, including Samsung, Micron and the Taiwan Semiconductor Manufacturing Company.

The White House hopes to accelerate the implementation of its semiconductor investments, but some companies have encountered obstacles. TSMC postponed initial production at its first plant in Arizona from this year until 2025 because local workers lacked expertise in installing advanced equipment.

Biden administration officials have also emphasized the need to ramp up apprenticeship programs to prepare a workforce that can fill factories in places like Arizona or Texas.

The money is hugely important to Intel and Patrick Gelsinger, who returned as CEO of the company three years ago and took on the dual mission of restoring Intel’s technological lead in manufacturing and America’s position in global chip manufacturing.

The company’s microprocessor chips, which provide computing power to most of the world’s computers, are regularly improved by advances at Intel factories in shrinking transistors to pack more of those tiny switches onto every piece of silicon. But Intel has stumbled over the past decade in delivering new generations of manufacturing technology, allowing TSMC and Samsung to build more advanced chips.

Mr. Gelsinger responded with an ambitious plan to introduce five new manufacturing processes in four years, along with a radical change in Intel’s business model. The company, which for decades has dedicated its factories to producing the chips it designs and sells, now competes with TSMC and Samsung in the so-called foundry sector of manufacturing chips designed by others.

He also initiated a costly expansion campaign with new or upgraded factories in Arizona, Ohio, New Mexico, Ireland, Israel and Germany. Mr. Gelsinger, perhaps the industry’s most outspoken supporter of the CHIPS law, did not wait for money from the Commerce Department before starting those construction projects.

But he seemed impatient with the speed at which the department was doling out grants, an effort that required complicated negotiations between companies and new specialists the government has hired.

“We have not announced our CHIPS grant yet,” Mr. Gelsinger said, speaking at a company event in February alongside Gina Raimondo, the Commerce Secretary, who attended by video link. “Yes, very soon, right?” he asked.

The company, whose business has been hit by a post-pandemic slowdown in sales of computers using its chips, has used debt financing and other tactics to help finance its expansion. But Mr. Gelsinger has made clear that he has faced pressure from Intel board members to justify spending on the new factories, which fabricate chips on silicon wafers and could cost $10 billion to $20 billion each.

The Energy Department is moving forward with an agreement to make a $2.3 billion loan to Lithium Americas Corp. in an effort to support domestic supplies of a mineral essential for electric vehicle production.

If completed, the loan would help finance construction from a lithium carbonate processing plant in Thacker Pass, Nevada. The plant would be located next to a mine site that contains the largest known lithium deposit in North America.

Demand for lithium, used in the rechargeable batteries that power electric vehicles, has soared as more consumers shift away from gas-powered cars and automakers ramp up production of cleaner vehicles. However, the United States has lagged behind other countries in production of the metal. Nearly 95 percent of the world’s lithium comes from just four countries: Australia, Chile, China and Argentina. Only 1 percent of the lithium used in the United States is harvested domestically. the Energy Department said.

Lithium carbonate from Thacker Pass could support battery production for up to 800,000 electric vehicles per year, according to the Energy Department. Administration officials also expect the project would create approximately 1,800 jobs and 360 operations jobs during construction.

Energy Department officials said the project would help strengthening the domestic supply chain for critical minerals, which they say are critical to “achieving our ambitious clean energy and climate goals and reducing our dependence on economic competitors like China.”

The country’s ability to achieve the Biden administration’s goal of net-zero emissions by 2050 will require broader adoption of electric vehicles, which can produce fewer or no emissions. The government wants half of new car sales to consist of electric vehicles by 2030.

Jonathan Evans, the president and CEO of Lithium Americas, said a statement that the conditional loan commitment was an “important milestone for Thacker Pass, which will help meet growing domestic needs for lithium chemicals and strengthen our nation’s security.”

The project is also backed by General Motors, which agreed in January 2023 to invest $650 million in the company to help develop the Thacker Pass mine. The company beat out 50 bidders, including battery and component manufacturers, for the stake. Many Western auto sector executives have recently bypassed traditional suppliers and committed billions of dollars to deals with lithium mining companies to secure their supply of the metal.

The federal loan, along with General Motors’ investment, is expected to provide the vast majority of capital needed to finance the first phase of the project, Lithium Americas officials said.

The mining project has previously come under scrutiny from Native American tribesmen, ranchers and ranchers environmental movements due to the potential impacts on groundwater and local wildlife habitat. Company construction began early last year after a federal court ruled in her favor and refused to revoke the decision to approve the project.

Lithium Americas officials said they are “heavily involved” with the nearby Fort McDermitt Paiute and the Shoshone Tribe. In 2022, the company entered into a binding agreement with the tribe to provide infrastructure improvements at Fort McDermitt, additional job training and employment for tribal members.

“The Thacker Pass will provide important economic and employment opportunities for members of our tribe,” Larina Bell, acting chairwoman of the Fort McDermitt Paiute and Shoshone Tribe, said in a statement.

The conditional agreement was issued by the Energy Department’s Loan Programs Bureau, which increased its lending authority tenfold from $40 billion to more than $400 billion under the Inflation Reduction Act of 2022. Since its creation, the agency has made more than $42 billion in loans and loan guarantees .

Although the department plans to finance the project, the company must first meet certain “technical, legal, environmental and financial conditions” before the deal is finalized, according to the department.

A six-week Federal Aviation Administration audit of Boeing’s production of the 737 Max plane revealed dozens of problems in the production process at the planemaker and one of its key suppliers, according to a slide presentation reviewed by The New York Times.

The air safety regulator launched the investigation after a door panel blew off a 737 Max 9 during an Alaska Airlines flight in early January. Last week, the agency announced that the audit found “multiple instances” in which Boeing and its supplier, Spirit AeroSystems, failed to meet quality control requirements, although it did not provide details of the findings.

The presentation reviewed by The Times, while highly technical, offers a more detailed view of what the audit yielded. Since the Alaska Airlines episode, Boeing has come under intense scrutiny over its quality control practices, and the findings add to the body of evidence about manufacturing defects at the company.

For the part of the investigation focused on Boeing, the FAA conducted 89 product audits, a type of assessment that looks at aspects of the production process. The aircraft maker passed 56 of the audits and failed 33 of them, with a total of 97 cases of alleged non-compliance, the presentation said.

The FAA also conducted 13 product audits for the portion of the investigation that focused on Spirit AeroSystems, which makes the fuselage or body of the 737 Max. Six of those audits resulted in passing grades, and seven in failing grades, according to the presentation.

At one point during the investigation, the air safety agency observed technicians at Spirit using a hotel key card to check the door seal, according to a document detailing some of the findings. That action was “not identified/documented/called out in the production order,” the document said.

In another instance, the FAA observed Spirit technicians applying liquid Dawn soap to a door seal “as a lubricant during the installation process,” the document said. The door seal was then cleaned with a wet cheesecloth, the document said, noting that the instructions were “vague and unclear as to what specifications/actions should be followed or recorded by the technician.”

Asked about the appropriateness of using a hotel key card or Dawn soap in such situations, a Spirit spokesperson, Joe Buccino, said the company was “reviewing all identified nonconformities for corrective action.”

Boeing did not immediately comment on the results of the audit. In late February, the FAA gave the company 90 days to develop a plan for quality control improvements. In response, CEO Dave Calhoun said that “we have a clear view of what needs to be done,” citing in part the audit findings.

Boeing said this month it was in talks to acquire Spirit, which it spawned in 2005. Mr. Buccino said Monday that Spirit had received preliminary audit findings from the FAA and planned to work with Boeing to address what the regulator had raised. He said Spirit’s goal was to reduce the number of defects and errors in its processes to zero.

“In the meantime, we are continuing multiple efforts to improve our safety and quality programs,” said Mr. Buccino. “These improvements focus on human factors and other steps to minimize non-conformances.”

The FAA said it could not release details of the audit because of the ongoing investigation into Boeing following the Alaska Airlines episode. In addition to that investigation, the National Transportation Safety Board is investigating what caused the door panel to blow off the plane, and the Justice Department has launched a criminal investigation.

During the FAA’s investigation, the FAA deployed as many as 20 auditors to Boeing and about half a dozen to Spirit, according to the slide presentation. Boeing assembles the 737 Max at its factory in Renton, Washington, while Spirit builds the aircraft’s fuselage at its factory in Wichita, Kan.

The audit at Boeing was broad and covered many parts of the 737 Max, including the wings and an assortment of other systems.

Many of the problems found by auditors fell into the category of not following an “approved manufacturing process, procedure or instruction,” the presentation said. Some other issues related to quality control documentation.

One audit involved the part that blew the Alaska Airlines plane, known as a door plug. According to the presentation, Boeing failed to do so. Some of the issues uncovered in that audit related to inspection and quality control documentation, although the exact findings were not detailed in the presentation.

The FAA’s investigation also examined how well Boeing employees understood the company’s quality control processes. The agency interviewed six business engineers and scored their responses, and the overall average score came to just 58 percent.

An audit at Spirit that focused on the door plug component revealed five issues. One of those issues, the presentation said, was Boeing’s “failure to provide evidence of approval of minor design changes in a method acceptable to the FAA.” It was not clear from the presentation what the design change was.

Another audit involved the door plug installation, and it was one of the audits where Spirit failed. The audit raised concerns about the Spirit technicians who performed the work and found that the company “failed to establish the knowledge necessary to operate its processes.”

Other audits where Spirit failed included one involving a cargo door and another involving the installation of cockpit windows.

Tesla was forced to halt production at its assembly plant outside Berlin early Tuesday after someone set fire to a nearby electricity pylon, sparking a blaze that cut off electricity to the factory and the surrounding region, police said.

Brandenburg police said they responded to the fire in a power pole in a field near the Tesla factory. The building was not damaged by the fire, but it did cause power outages in the central and wider region, where around 60,000 people live.

Tesla did not respond to requests for comment, but a spokeswoman for the US carmaker confirmed to German media that production had been halted and all employees had been evacuated. According to Tesla, about 12,500 people work at the plant, but not all of them would have been present when the power went out.

By early afternoon, residents reported that power had been restored in some areas.

Authorities said investigators from the Brandenburg State Bureau of Criminal Investigation had begun an investigation but urged speculation about who might be behind the arson, even as social media exploded with accusations blaming environmentalists.

Since last week, several dozen protesters have camped in huts and platforms built into the branches of trees in a wooded area next to the factory Tesla built. would like to destroy to build a railway yard, warehouses and educational facilities.

Last month, 65 percent of eligible voters in Grünheide, the community surrounding the factory, cast their votes against Tesla’s expansion plans. The vote was non-binding, but local officials said they would comply by going back to the drawing board to try to find an acceptable solution.

Environmental protesters have said they fear state and local governments, which have worked to lure Tesla to the site in 2022 and celebrated the economic benefits it has brought to the region, will override citizens’ wishes.

Brandenburg’s top security official, Interior Minister Michael Stübgen, condemned the suspected arson. “If the initial findings are confirmed, this is an insidious attack on our electricity infrastructure,” Mr Stübgen said. “This will have consequences.”

Tesla’s assembly plant in Grünheide is the company’s only one in Europe. It has a capacity to build about 500,000 cars a year, but the company is keen to double that. 1 million cars a year – more than the 800,000 Volkswagen produces at its long-standing factory in Wolfsburg.

A leading Berlin daily, Tagesspiegel, said a group calling itself “Vulkangruppe” and identifying itself as linked to the anti-fascist movement had sent a letter to the newsroom claiming responsibility for the attack.

“Turn off Tesla,” the letter said. according to the paper. A group of far-left extremists trading under the same name claimed responsibility for a 2021 attack that cut power to the Tesla factory construction site. That same year, security officials in the state of Brandenburg named the group in their annual report for committing several arson attacks in Greater Berlin.

Saudi Arabia, the de facto leader of the Organization of the Petroleum Exporting Countries, said on Sunday it would extend oil production cuts through June, noting it was acting “in coordination with some” other states. Saudi allies including Kuwait and the United Arab Emirates said Sunday they would also continue their cuts.

The decision to maintain production cuts was expected and appears intended to support otherwise weak oil prices. Some analysts predict that oil supply will exceed demand in the first half of this year. Without further cuts, prices could fall.

Saudi Arabia described the measure as a “precautionary measure.” Holding back oil production is “aimed at supporting the stability and balance of oil markets,” the kingdom said in a statement carried by the official Saudi Press Agency.

The Saudis said the one million barrels per day they started cutting in July “will be gradually returned depending on market conditions.”

Giacomo Romeo, an analyst at investment bank Jefferies, said on Sunday the decision confirmed the group was “in no rush to return” stock.

The Saudis are selling far less oil than they can produce as non-OPEC countries, especially the United States and Guyana, increase production. Russia, a member of OPEC Plus, has also managed to produce more oil than some analysts expected after invading Ukraine in 2022.

Oil demand growth this year is also expected to be modest, at about 1.5 million barrels per day, or about 1.5 percent of global demand, according to Goldman Sachs.

Sunday’s announcement follows the Saudis’ announcement in January that they were halting a campaign to increase the amount of oil that Saudi Aramco, the state oil giant, can produce. Aramco had planned to produce 13 million barrels per day, an increase of one million per day over what it can currently produce.

That January decision confirmed that the kingdom “wants a tight oil market,” Goldman Sachs analysts said in a recent research note.

Moreover, the Saudis appear to have decided, at least for now, that there is little point in spending billions of dollars to pump at levels much higher than the current nine million barrels per day they are producing.

Oil prices have been rising in recent weeks, partly on concerns that the war between Israel and Gaza will spill over into the oil-producing countries of the Middle East. Brent crude, the international benchmark, sold for about $83.55 late last week, the highest level in about four months.

Analysts say price increases so far remain modest because there has been no actual disruption to oil production due to the fighting.

Instead, OPEC and its allies voluntarily withdraw oil from the market. In November, several OPEC Plus members, including the United Arab Emirates, Iraq and Kuwait, joined the Saudis in agreeing to new cuts.

The millions of barrels per day of production these countries are keeping off the market could be used in an emergency to offset most potential disruptions, analysts say.

In December 2022, Taiwan Semiconductor Manufacturing Company, the main maker of the world's most advanced chips, said it planned to spend $40 billion in Arizona on its first major U.S. semiconductor manufacturing hub.

The much-discussed project outside Phoenix — with two new factories, including one with more advanced technology — became a symbol of President Biden's quest to boost domestic production of chips, the bits of silicon that help all kinds of devices make calculations and store data. to beat.

Last summer, TSMC postponed initial production at its first plant in Arizona from this year until 2025 because local workers lacked expertise in installing advanced equipment. Last month, the company said the second factory would not produce chips until 2027 or 2028, rather than 2026, citing uncertainty over technology choices and federal funding.

Progress at the Arizona site depends in part on “how much incentive the U.S. government can provide,” Mark Liu, chairman of TSMC, said in an investor call.

TSMC is just one of many chipmakers facing obstacles in their U.S. expansion plans. Intel, Microchip Technology and others have also adjusted their production schedules as a slump in sales of many types of chips puts pressure on companies to control their spending on new infrastructure. New chip factories are enormously complex, involving thousands of construction workers, long construction times and billions of dollars in machinery.

The delays come as the Biden administration begins handing out the first major prizes from a $39 billion pot of money aimed at building the U.S. semiconductor industry and reducing the country's dependence on technology that manufactured in East Asia. On Monday, the administration said it would award $1.5 billion in grants to chipmaker GlobalFoundries to upgrade and expand facilities in New York and Vermont that make chips for automakers and the defense industry.

But the problems companies like TSMC are facing with their projects could undermine this fanfare, raising questions about the prospects for success for President Biden's industrial policy program. The investments are expected to play a major role in Biden's re-election campaign in the coming months.

“Nothing has failed yet,” said Emily Kilcrease, a senior fellow and director of the energy, economy and security program at the Center for a New American Security, a Washington think tank. “But we will need to see some progress and the plants actually come on line in the coming years before the program can be considered a success.”

The Department of Commerce is responsible for distributing federal money from the CHIPS Act of 2022 to boost domestic chip production. In addition to the grant to GlobalFoundries, the department has provided two small production grants to date. It is expected to hand out much larger rewards in the billions of dollars to chipmakers such as TSMC, Intel, Samsung and Micron in the coming weeks and months.

The government is engaged in complex negotiations with these major chip manufacturers over the amount and timing of the rewards. Companies are also still awaiting guidance from the Treasury Department on which investments will qualify for a new tax credit aimed at advanced manufacturing, which was expected before the end of 2023.

Any delays in the process could hurt the United States in its rush to reduce global dependence on chip factories in Taiwan, South Korea and China, analysts said. Rival countries are offering their own incentives to take chip makers to court. For example, TSMC plans to expand production in Japan and Germany, as well as in the United States.

The longer the U.S. government waits to distribute the benefits, “the more other regions will pick up these investments, and more leading investments will be made in East Asia,” said Jimmy Goodrich, a senior adviser for technology analysis at the RAND. Company. “So the clock is ticking.”

A Commerce Department official disputed suggestions that it had been slow to distribute stimulus. He said the ministry was taking time to protect taxpayers' interests and pushing companies to do more to strengthen the domestic chip supply chain.

A White House official said the chip companies' schedule changes were minor adjustments that were common on complex projects like the new manufacturing sites. He added that forecasts suggested there would be overwhelming demand for these chips if the facilities started making them.

A Treasury spokeswoman said officials there had provided clarity on tax credits for companies planning investments and were working to issue additional guidance as soon as possible.

The CHIPS Act allowed for subsidies and other incentives to boost U.S. chip production, plus tax breaks for investments in factories and manufacturing equipment. More than 600 companies and organizations had submitted expressions of interest for the grants, the Commerce Department said, while estimating private investment commitments to date at $235 billion.

But most of the expansion plans came when chips were in short supply several years ago, following a pandemic-induced burst in consumer spending on electronic products. That demand dried up, leaving chip makers with large inventories of unsold components and little immediate need for new factories.

“Companies are rethinking how and what and when investments will happen,” said Thomas Sonderman, the CEO of SkyWater Technology, a Minnesota chipmaker that has won Defense Department grants and is targeting CHIPS Act funding.

One chip manufacturer feeling the pressure is Microchip, an Arizona company. Two years ago, Microchip was flooded with orders. It has applied for CHIPS Act funding to ramp up production and is expected to receive $162 million. But as sales have fallen, it recently announced two separate two-week factory closures.

Microchip still plans to upgrade its factories in Oregon and Colorado, which are poised to receive CHIPS Act grants, said Ganesh Moorthy, chief executive officer. But ordering machines to increase production capacity will have to wait until business conditions improve.

“We have stopped the expansion,” Mr Moorthy said.

Intel, which is expanding production, has also adjusted its purchases of expensive factory tools. The company recently said it did not expect to start manufacturing in Ohio, where it is spending $20 billion on two new factories, in 2025 as it had originally expected. The change was previously reported from The Wall Street Journal.

Still, Intel said neither construction at that location nor its plans to expand in the United States and three other countries had slowed.

“The strategy doesn't change from quarter to quarter,” said Keyvan Esfarjani, the executive vice president who oversees Intel's manufacturing operations. “We remain on track.”

Some chip makers, such as Texas Instruments and Micron Technology, continue to expand chip production for competitive reasons. New factories can help make higher quality chips, more of them and cheaper.

Micron continues to build a $15 billion factory in its hometown of Boise, Idaho, and plans an even larger manufacturing complex near Syracuse, NY, despite a downturn in the market for its memory chips, which store data in devices such as smartphones and computers. .

Scott Gatzemeier, a Micron vice president overseeing the expansion, said construction projects that took several years to complete should be based on future chip demand rather than current conditions. Renting huge cranes and other equipment and securing construction workers, he added, are major expenses that may have to be repeated if a project is abandoned.

“Once you start, you don't want to stop,” he said.

Other chip manufacturers are unwilling to start construction without government money. SkyWater's Mr. Sonderman, for example, said his company's plans for a $1.8 billion facility in Indiana depend on securing funding through a portion of the CHIPS Act focused on research.

Unforeseen problems have piled up at TSMC's Arizona location over the past year.

Last summer, construction unions in the state raised workplace safety issues and objected to TSMC bringing workers from Taiwan to help install advanced equipment at its first factory. Delays in installing machines led to an announcement about the production slowdown in July.

In December, TSMC and the Arizona Building and Construction Trades Council reached an agreement on ground rules at the site for safety, on-the-job training, staffing and other issues. In an emailed statement, Mr. Liu, who recently announced plans to retire, sounded hopeful that tensions among employees would be over.

He acknowledged “challenges” in building the first factory in Phoenix, but said TSMC was still “the fastest mover” among its peers in completing such projects. Although he told analysts in January that the company would delay the start of production at its second factory, also known as a factory, worker skills are unlikely to be one of the reasons.

“We believe that the construction of our second factory will be much smoother,” Mr. Liu said. “Arizona workers are learning things quickly.”