US Government Set to Provide "Billions" To Chipmakers Like Intel & TSMC For Setting Up Facilities

The Biden administration is set to provide "billions of dollars" in funding to chipmakers like Intel and TSMC in an attempt to haste the process of setting up in-house facilities.

Biden Administration All Set To Promote In-House Production Through Large-Scale Funding, Attracting Several Firms To The US

The new round of subsidies by the US government is targeted towards helping firms make their transition into the US through ramped-up financing for setting up new factories. Based on a report by the Wall Street Journal, the new funding will reportedly benefit the members of the CHIPS Act, which includes the likes of Intel, TSMC, and several other firms that decided to shift their facilities to the US to promote the government's narrative of "in-house" production and to stay safe from the rising hostilities with nations such as China. It is said that the new financing will award billions of dollars, although a specified amount hasn't been disclosed yet.

For those unaware, this effort by the government comes under the CHIPS Act, an incentive by the US government with the sole target of attracting semiconductor firms into the nation. The benefits include $280 billion in grants, including $52 billion in federal investments and tax breaks for domestic semiconductor research, design, and manufacturing provisions. The ultimate target was to reduce the reliance of the United States on nations such as Taiwan and China by providing the economic resources for the firms to initiate a transition.

This is a merit-based process with tough commercial negotiations — CHIPS awards will be entirely dependent upon which projects will advance US economic and national security.

- U.S. Department of Commerce via Reuters

The likely recipient of the new funding is Intel, which is currently in the process of setting up large-scale facilities in Arizona, Ohio, New Mexico, and Oregon, along with the Taiwan Semiconductor Manufacturing Co. (TSMC). Both of the mentioned firms are indeed developing "costly" facilities, with total costs exceeding the $80 billion mark. However, despite that huge economic funding, there had been reservations about the policies set in the CHIPS Act, particularly by Intel, who exclaimed that they should get a larger portion of the funding since they are apparently "more committed" to any other beneficiary.

The CHIPS Act has done the job when it comes to attracting the interest of chipmakers, but questions are being raised on the actual process since the involved firms are being faced with numerous issues as well, which include a lack of adequate manpower and much more. Just recently, it was disclosed that TSMC's 3nm facility in Arizona is pushed back to 2027, which shows that economic resources aren't everything to make the 'US transition" actually effective.