The Biden administration is poised to allocate substantial subsidies, totaling billions of dollars, to leading semiconductor companies, such as Intel and Taiwan Semiconductor Manufacturing Co (TSMC), with the intention of fostering the establishment of new semiconductor manufacturing facilities within the United States.
This development, as reported by the Wall Street Journal, is geared towards revitalizing the production of advanced semiconductors that drive innovations in smartphones, artificial intelligence, and defense systems.
Industry insiders familiar with the negotiations have disclosed that certain announcements regarding these subsidies are expected to be made prior to U.S. President Joe Biden’s State of the Union address on March 7.
Intel, a prominent recipient of these subsidies, is actively involved in projects spanning Arizona, Ohio, New Mexico, and Oregon, collectively amounting to a substantial investment exceeding $43.5 billion.
Similarly, Taiwan Semiconductor Manufacturing Co (TSMC) is earmarked to receive support, as it undertakes the construction of two manufacturing facilities near Phoenix, representing a combined investment of $40 billion.
South Korea’s Samsung Electronics is also in the running, with a sizable $17.3 billion project in Texas.
Other contenders, as indicated by the Wall Street Journal, include Micron Technology, Texas Instruments, and GlobalFoundries.
Requests for comments from the U.S. Department of Commerce, Intel, and TSMC regarding these prospective subsidies remained unanswered at the time of reporting. Nevertheless, this development is not entirely unexpected.
In December of the previous year, U.S. Commerce Secretary Gina Raimondo had conveyed her intent to bestow approximately a dozen funding awards specifically aimed at supporting semiconductor chip production within the coming year.
These awards, some amounting to multi-billion dollars, have the potential to significantly reshape the landscape of chip manufacturing in the United States.
The initial award, unveiled in December, amounted to over $35 million and was allocated to BAE Systems, specifically to fund a facility in Hampshire tasked with producing chips for fighter planes.
This award was part of the “Chips for America” subsidy program, sanctioned by the U.S. Congress in 2022, with a total budget of $39 billion.
As the Biden administration gears up to announce further subsidies for semiconductor companies, the aim is to bolster domestic chip production capabilities, ensuring the United States remains competitive in an industry critical to modern technology and defense systems.