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The United States may announce significant funding for chip factories by the end of March

Publish Date: 2024.01.30

  According to Bloomberg, the US government plans to announce significant funding for chip factories by the end of March, providing billions of dollars to semiconductor manufacturers to promote domestic production.

  

  This is one of the core contents of the Chips and Science Act of 2022, which sets aside $39 billion in direct funding to revitalize the US manufacturing industry. Intel Corp. and other chip manufacturers may be eligible to receive these payments.

  

  Intel has stated that this funding will determine the pace of its expansion projects, including plans to build the world's largest chip factory in Ohio. Overseas chip manufacturers such as TSMC and Samsung Electronics Co. are also expected to receive some funding to help them pay for building factories in the United States.

  

  This effort aims to balance the dangerous concentration of the chip industry in East Asia. Prior to the November election, funding has also become a key pillar for Biden to convey economic messages, and funding will create thousands of high paying jobs in new factories nationwide.

  

  Joe Biden; Image source: US government official website

  

  So far, the disbursement of this fund has been slow, with only two smaller appropriations announced more than a year after the enactment of the bill. According to a report by The Wall Street Journal on January 28th, funding to help build a new factory may be in place in the coming weeks.

  

  From a timeline perspective, these funds may be announced before President Biden's State of the Union address on March 7th. Spokespersons for the White House and Intel declined to comment on this.

  

  US Secretary of Commerce Gina Raimondo said that the Department of Commerce plans to announce more than a dozen grants this year, including several billion dollar grants to support advanced chip manufacturing facilities. These grants may be issued in the form of a combination of grants, loans, and loan guarantees, up to a maximum of 15% of project costs. The US Department of Commerce declined to comment on this.

  

  For chip manufacturers, these grants will help alleviate the financial burden of building factories, which could cost up to $30 billion. In recent years, semiconductor companies have pledged to invest over $230 billion in the United States, with many companies explicitly stating the conditions for obtaining government support.

  

  Intel CEO Pat Gelsinger, a leading figure in the chip industry, has been lobbying the government to provide funding. Intel used to be the world's largest chip manufacturer, but now lags behind its competitors, and building factories on a large scale is part of its plan to make a comeback.

  

  At present, Intel is building or planning factories in Arizona and Ohio, and is also planning a new factory in Germany. Gelsinger also hopes to receive support from the European government.

  

  TSMC, the world's largest chip manufacturer, plans to spend $40 billion to build two manufacturing plants in Arizona. However, due to labor and cost challenges faced by the first factory, the company has postponed the start of production for two factories. The company recently stated that funding from the United States will help determine the technological advancement level of the second factory.

  

  From an election perspective, the projects in Arizona and Ohio will be crucial in the election: Biden won Arizona with only 10000 votes in 2020, and manufacturing will become the core theme of a key Senate campaign in Ohio.

  

  At the same time, governments around the world are also vigorously promoting their own chip projects. Some countries have also signed agreements with industry giants and promised to bear up to half of the construction costs.

  

  When this article was reprinted, Gaishi Automotive Information Network

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