The distribution of subsidies under the US CHIP Act totaling

The distribution of subsidies under the US CHIP Act totaling $39 billion is scheduled to begin at the beginning of March

The “chip law” passed by the US authorities as early as 2022, which provides for government support for their production and development totaling $53 billion, has so far helped only a few manufacturers to be more confident in the future of their business to look at the country. Sources expect a number of key announcements to be made this quarter.

    Image source: Intel

Image source: Intel

edition The Wall Street Journal explains that more than 170 companies have applied for funding under this legislative initiative, but US authorities have so far awarded only two small grants for projects not related to advanced semiconductor technologies. Now President Biden’s administration plans to make a series of announcements about larger, more advanced projects ahead of his State of the Union address on March 7. With regard to the development of the election campaign, such a course is in the interest of the US Democratic Party.

Intel does not hide the fact that it expects subsidies in the United States, as it implements at least four projects in different states of the country worth a total of $ 43.5 billion, although it is obvious that state funds cover only a small part of it will be costs. Of the program’s total budget of $53 billion, only $39 billion is allocated directly to business construction needs. According to experts, each project will receive a subsidy of a maximum of 15% of the capital costs, with a maximum of $3 billion per company. In addition, the US authorities are ready to compensate loan funds, act as guarantors for them and provide tax deductions. Representatives of the US Department of Commerce said that decisions on the allocation of subsidies for each of the projects will precede negotiations in which the benefits of the company under construction for the development of the US economy and increasing the level of national security will be assessed.

It is clear that projects already being implemented by companies in the US are facing problems, and the delay in the construction of Taiwan’s TSMC plants in Arizona is an example of this. It is now known that both companies under construction experienced delays compared to the original schedule. This alone will dampen the enthusiasm of investors considering different countries for building new businesses, thereby reducing the chances that the United States will become the site of the next construction site. True, American officials prefer to cite TSMC’s activities in Arizona as an example of how the chip law benefits the national economy. More than 12,000 people work in this location alone every day, and nationwide this law has already pushed private companies to invest $200 billion. However, it is obvious that the construction industry is facing a shortage of qualified personnel and the installation of equipment is much slower than in Japan or Taiwan, where, for example, TSMC allows new companies to emerge much faster.

In addition to the onerous conditions associated with receiving subsidies in the United States, semiconductor industry representatives also find it confusing to examine projects from the perspective of compliance with the environmental agenda. Not only can it take years, but the requirement to use renewable energy sources also significantly increases the construction budget. Subsidy recipients are also restricted in their ability to set up business in China for 10 years, and U.S. authorities want to confiscate excess profits from them. All this makes it difficult for companies to make decisions about the feasibility of building large businesses specifically in the United States, since at the same time they have to calculate the prospects for selling products in the local market, and these are not always obvious.

About the author

Dylan Harris

Dylan Harris is fascinated by tests and reviews of computer hardware.

Add Comment

Click here to post a comment