The CHIPS Act was signed into law in August 2022. The aim is to boost semiconductor manufacturing in the US, not just for commercial reasons but for broader strategic reasons, including a desire to reduce dependence on manufacturing in Asia. Some of the money earmarked to lure chipmakers to U.S. soil will soon flow, with Samsung, Intel and TSMC set to receive billions of dollars in grants and subsidies.
Bloomberg Samsung is reportedly poised to receive $6 billion in federal funding, TSMC is set to secure over $5 billion, while Intel could receive up to $10 billion. Factories in the USA are planned or under construction for all three companies.
Samsung is building a 4nm EUV manufacturing facility in Taylor, Texas, scheduled to begin operations in 2025. The cost of the factory was originally estimated at around $17 billion Reuters The new factory will reportedly cost up to $25 billion due to inflation and higher labor costs.
It would be reasonable to expect Samsung to use the incoming funds to offset this increase in costs, but Bloomberg's sources suggest that Samsung plans to expand beyond its Texas operations, although what exactly that means is unclear for now.
Intel is building facilities near Columbus, Ohio. The company is also expanding its facilities in Arizona and opened its Fab 9 plant in New Mexico in January. The Ohio plant has been hit by several delays, so the incoming CHIPS funds will be a welcome boost. According to the Wall Street JournalThe delay is partly due to the slow adoption of CHIPS money.
As for TSMC, the proposed $5 billion is just a fraction of the company's planned $40 billion in U.S. investments. The Arizona facility is under construction, but there have been delays. TSMC Chairman Mark Liu said CNN It must be examined “how many incentives… the US government can offer”.
I don't know if I would call this a shakedown, but it certainly sounds like it.
Now that the discoveries are flowing, it will be interesting to see how chipmakers respond. Billions of dollars in CHIPS grants and loans will be welcome, but when compared to the total cost of these state-of-the-art facilities, one begins to wonder whether all that money will be enough incentive for chipmakers to continue investing in the long term.
