The Biden administration is anticipated to award billions of dollars in subsidies to top semiconductor companies. It includes Intel and Taiwan Semiconductor Manufacturing Co.
This step is aimed to help build new manufacturers in the United States, the Wall Street Journal notified on Saturday.
The forthcoming announcements seek to kick-start manufacturing of advanced semiconductors that power smartphones, artificial intelligence and weapons systems, the WSJ conveyed, noting industry executives are aware of the negotiations.
The WSJ added that the executives hope some announcements will come before U.S. President Biden’s State of the Union address on March 7.
The paper stated that among the likely recipients of subsidies, Intel has projects underway in Arizona, Ohio, New Mexico and Oregon that will cost more than $43.5 billion.
Another potential recipient, Taiwan Semiconductor Manufacturing Co (TSMC), has two factories under construction near Phoenix for a total investment of $40 billion. South Korea’s Samsung Electronics, also a candidate, has a $17.3 billion project in Texas.
Micron Technology, Texas Instruments and GlobalFoundries count among other top candidates, WSJ stated, citing industry executives.
In December last year, U.S. Commerce Secretary Gina Raimondo expressed she would make around a dozen budget awards for semiconductor chips within the next year, including multi-billion dollar announcements that could drastically advance U.S. chip production.
The first award was reported in December, of over $35 million to a BAE Systems facility in Hampshire to build chips for fighter planes, part of a $39 billion “Chips for America” subsidy agenda approved by the U.S. Congress in 2022.
It’s ambiguous if subsidy announcements would affect share prices. Chips Act subsidies were going to happen at some point. Also, the information would be preliminary, according to The Wall Street Journal. Final arrangements would come later, with funds released in stages.
In Friday’s market trading, Intel stock dropped 11.9% to 43.65, gapping below the 50-day line. TSM stock is up 12.75% in 2024, striking 23-month highs. Shares fired out of base on a bullish Taiwan Semi guidance for 2024 earlier this month.
On the other hand, The chairman of Taiwan’s most prominent chip designer, Mediatek’s Tsai Ming-kai, recently expressed dismay over US semiconductor sanctions, stating they may hurt Taiwan’s chip houses.…
“United States export controls against China’s advanced chip sector in October last year has provoked Chinese government budgets to flow into the mature chip technology sector, and we acknowledge Taiwan’s small and mid-size chip design houses will perhaps be the first to be affected,” Tsai reportedly expressed.
The chairman was talking at the release of a white paper he co-authored by the Taiwan Semiconductor Industry Association and Digitimes titled “Taiwan IC Design Industry Policy White Paper.” The TSIA directed the document as the first policy white paper formed by the IC design industry in Taiwanese history.
Tsai stated that hefty subsidies and tax incentives proposed by the US, the EU, Japan, and South Korea are increasing the industry’s competitiveness and should be watched cautiously.
He also stated he expects the government to establish its own Chips Act, which he urged should concentrate on more than top chipmaking businesses to think of the entire ecosystem, including design, integration and downstream application. He considers the entire investment should be at least around $1.4 billion.
“At this time, Taiwan’s IC design industry is encountering hidden concerns such as the rapid rise of Chinese players, the severe lack of domestic talents, and the rare players investing in advanced technologies/products, and it is critical to take active action to consolidate its current competitive advantage and market position,” expressed TSIA in a statement.
