The Biden administration is planning to allocate significant financial support, amounting to “billions of dollars,” to semiconductor manufacturers such as Intel and TSMC. This move aims to expedite the establishment of domestic facilities by providing enhanced funding for the construction of new factories.
According to a Wall Street Journal report, the funds will primarily benefit members of the CHIPS Act, including Intel and TSMC, among others, which have opted to relocate their facilities to the United States. The amount of funding being provided is not disclosed. It is expected to be in the billions.
More About US Government Allocating Funds to Chipmakers
The CHIPS Act is designed to encourage semiconductor companies to establish operations within the United States. This initiative includes grants totalling $280 billion consisting of $52 billion in investments and tax incentives for semiconductor research, design, and manufacturing activities. The main objective is to reduce the United States’ dependence on countries like Taiwan and China by providing resources that facilitate the transition for these companies.
Intel, currently involved in establishing facilities in Arizona, Ohio, New Mexico, and Oregon along with Taiwan Semiconductor Manufacturing Co. (TSMC), is likely to benefit from this new funding. Both companies are making investments with a combined cost exceeding $80 billion. However, concerns have been raised about how the funds outlined in the CHIPS Act will be distributed. Intel has specifically expressed reservations. Believes it should receive a share of the funding due to its perceived greater commitment compared to other beneficiaries.
Although the CHIPS Act has caught the attention of semiconductor manufacturers there are doubts, about how effective the actual transition process will be. Businesses encounter difficulties such, as a lack of workforce which shows that merely having resources may not be enough to guarantee the success of the “U.S. Transition.” Recent disclosures, like the postponement of the TSMC 3 plant in Arizona, until 2027 highlight the intricacy of the transition process that goes beyond factors.
