As the election approaches, the Biden administration is eager to highlight a landmark economic measure and is expected to provide billions of dollars in subsidies to Intel, TSMC, and other top semiconductor companies in the coming weeks to help them establish new factories. This is also the third subsidy under the US Chip Act.
Unlike the previous two subsidies, this time the subsidy is for advanced process semiconductor technology, and the funding is much larger. The Biden administration hopes to accelerate the construction of new factories across the United States.
According to industry insiders, the companies that receive subsidies this time are those manufacturing advanced chips for smartphones, artificial intelligence, and other applications. It is expected that US President Biden will announce this news before his State of the Union address on March 7th.
It is reported that Intel is most likely to receive subsidies, as the company has already upgraded or built factories in Oregon, Arizona, New Mexico, and Ohio in the United States, at a cost of over $43.5 billion.
Another possible beneficiary is TSMC, which is building two chip factories near Phoenix, Arizona with a total investment of $40 billion. The company recently claimed that the production of the second factory will be delayed.
As a leading global OEM manufacturer, TSMC's projects in the United States have frequently encountered setbacks. The recent statement by the chairman of the company, Liu Deyin, further indicates that the Arizona project is facing challenges, including a shortage of skilled workers and difficult negotiations to obtain funding from the US government.
Analysts say that the delay may be a negotiation strategy adopted by TSMC in order 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.
US officials have stated that TSMC emphasizes that its projects in Arizona face numerous issues, which is a negotiation strategy aimed at maximizing its share of funding under the Chip Act. According to the US Department of Commerce, more than 500 companies have expressed interest in obtaining funding for the program, and more than 170 companies have submitted applications.
In addition, South Korea's Samsung Electronics is also expected to receive some funding, as the company has a $17.3 billion project in Texas. Micron Technology and Texas Instruments are also among the competitors.
In August 2022, US President Biden signed the Chip Act into law, which will provide $52.7 billion to subsidize the US chip industry. The first subsidy under the Chip Act was announced in December last year, worth $35 million, and was granted to BAE Systems for the production of fighter chip factories.
At the beginning of this month, the second subsidy was announced, and the US government announced a $162 million offer to Microchip Technology, aimed at helping the company double its production capacity.
Last December, US Secretary of Commerce Raymond announced that she would provide approximately 12 subsidies to the semiconductor chip industry over the next year, some of which amounted to billions of dollars and could completely reshape US chip production.