With the election approaching, the Biden administration is eager to highlight a signature economic initiative and is expected to distribute billions of dollars in subsidies to Intel, TSMC and other top semiconductor companies in the coming weeks to help them build new factories. It is also the third subsidy of the US Chip Act.
Different from the previous two subsidies, this one is subsidizing advanced process semiconductor technology, and the amount of funds is much larger. The Biden administration hopes to accelerate the construction of new factories across the United States.
According to industry insiders, those receiving subsidies this time are manufacturing companies that produce advanced chips for smartphones, artificial intelligence, etc. U.S. President Biden is expected to announce this before delivering the State of the Union address on March 7.
It is reported that Intel is the most likely to receive subsidies. The company has upgraded or built new factories in Oregon, Arizona, New Mexico and Ohio in the United States, which will cost more than $43.5 billion.
Another possible beneficiary is Taiwan Semiconductor Manufacturing Co., Ltd., which is building two chip factories near Phoenix, Arizona, with a total investment of $40 billion. The company recently claimed that the start-up of its second factory would be delayed.
As the world's leading contract manufacturer, TSMC's projects in the United States have frequently encountered setbacks. Recent comments by the company's chairman, Liu Deyin, further indicate that the Arizona project faces challenges, including a shortage of skilled workers and difficult negotiations to secure the amount of U.S. government funding.
Analysts said that the above delay may be a negotiation strategy adopted by TSMC to obtain more financial support from the United States, and also highlights the challenges faced by the United States in attracting chip manufacturers to build factories in the United States.
U.S. officials said TSMC's emphasis on the many problems facing the Arizona project was a negotiating tactic aimed at maximizing the share of CHIP Act funds it could receive. According to the U.S. Department of Commerce, more than 500 companies have expressed interest in receiving funds from the program, and more than 170 companies have submitted applications.
In addition, South Korea's Samsung Electronics is also expected to receive part of the funding. The company has a $17.3 billion project in Texas. Micron Technology and Texas Instruments are also among the contenders.
In August 2022, US President Biden signed the "Chip Act" into law, which will provide US$52.7 billion to subsidize the US chip industry. The first subsidy under the CHIP Act, worth $35 million, was announced in December and was awarded to BAE Systems' factory that produces fighter chip chips.
A second tranche of subsidies was released earlier this month, with the U.S. government announcing $162 million to Microchip Technology, a move designed to help the company triple its production capacity.
In December last year, U.S. Commerce Secretary Raimondo said that she would provide about 12 subsidies to the semiconductor chip industry in the next year, with some projects worth billions of dollars and could completely reshape U.S. chip production.