The US is aiming to announce major chip grants by the end of March, people familiar with the plans said, paving the way to send billions of dollars to semiconductor makers in a bid to supercharge domestic production.
The awards — slated to go to Intel Corp and other chipmakers — are a central piece of the US’ 2022 CHIPS and Science Act, which set aside US$39 billion in direct grants to revitalize US manufacturing.
Intel has said that the grants would determine how quickly it progresses with expansion projects, including a planned facility in Ohio that would be the world’s largest. Overseas chipmakers such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co are also expected to receive a portion of the funds, helping them pay for factories in the US.
Photo: Sam Yeh, AFP
The money has been slow to trickle out so far, with only two small grants announced more than a year after US President Joe Biden signed the landmark initiative into law.
The effort, aimed at rebalancing what Washington sees as a dangerous concentration of production in East Asia, is a key pillar of Biden’s economic message heading into the US’ November elections. It brings promises of thousands of well-paying factory jobs in new manufacturing hubs across the country.
The timing suggests the awards might be unveiled before Biden’s State of the Union address on March 7.
US Secretary of Commerce Gina Raimondo has said her agency plans to create about a dozen awards this year, including several multibillion-dollar grants to support advanced chipmaking facilities. The awards, which could come as a combination of grants, loans and loan guarantees, would cover up to 15 percent of project costs.
For chipmakers, the disbursements would help cushion the financial impact of building facilities that can cost as much as US$30 billion and yet be obsolete within a decade. Semiconductor companies have pledged to invest more than US$230 billion in the US in the past few years, many on the explicit condition that they receive government support.
Intel chief executive officer Pat Gelsinger has been the leading industry voice lobbying for that funding. The company is building or planning factories in Arizona and Ohio, as well as a new site in Germany — where Gelsinger is counting on European support.
TSMC, the world’s largest contract manufacturer of chips, plans to spend US$40 billion to build two fabs in Arizona.
However, the company has delayed the start of production at the two sites due to labor and cost challenges at the first fab. It said that US incentives would help determine how advanced the technology inside the second facility would be.
The projects in Arizona and Ohio carry significant electoral weight: Biden won the first state by just 10,000 votes in 2020, and manufacturing is set to be a central issue in a key Senate race in Ohio.
Governments around the world, meanwhile, have been plowing ahead with their own chip programs. Several have inked agreements with the biggest names in the industry and promised to cover as much as half of construction costs.
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