November 20, 2024 at 02:14PM
The US Chips Act was a bipartisan supported legislation designed to incentivize the building of chip manufacturing in the US. TSMC and Intel have been some of the key beneficiaries and as such each are building new facilities for manufacturing. The awarding of $1.5 billion to global foundry’s seems to be part of that chips act funding
At risk is the change in administrations and the Trump preference to support tariffs over grants. As a result,
U.S. officials are rushing to finalize $39B in Chips Act manufacturing grants, primarily for Intel, before President Biden’s term ends.
$30B remains tied up in complex negotiations, with Intel’s share reaching up to $11.5B for projects in AZ, NM, OH, and OR.
Commerce highlights 125K jobs and significant domestic investment as key program benefits.
Other details on the chips act
The White House vowed to implement the Chips Act “with speed and efficiency” citing its national-security and economic importance.
Commerce Secretary Gina Raimondo has championed U.S. chip manufacturing to address geopolitical competition with China.
Rising chip plant costs, exceeding $20B for cutting-edge factories, and overseas incentives have reduced U.S. production to 10% of global output.
Taiwan Semiconductor received the first major grant of up to $6.6B for Arizona projects, while lengthy negotiations have frustrated companies and business groups.
Intel, despite delays, remains committed to working with both the Biden and Trump administrations to restore U.S. chip-making leadership.
Pres. Trump announced Howard Lutnick as the new head of the Commerce Department. The Chips Act will be a key barometer for gauging the preferences of the new administration. It was not long ago that supply chain shocks including chip shortages for automobiles, sent prices sharply to the upside. Having domestic production would have eased that pain. Also the threat to Taiwan from China is a key geopolitical risk that would impact chip supply for vital industries in the US (and elsewhere too).
This article was written by Greg Michalowski at www.forexlive.com.
