The US government is preparing a $52 billion federal program to bolster semiconductor chip production in the country. The program is currently in the stage of finalization but there are already some tensions around it. TSMC and Samsung, the world’s two largest semiconductor manufacturing companies, expectedly want a chunk of this multi-billion pool of government subsidy. But Intel has reportedly suggested that the Biden administration should not give US taxpayers’ money to foreign companies.
“Arbitrary favoritism and preferential treatment based on the location of a company’s headquarters is not an effective or efficient use of the grant and ignores the reality of public ownership for most of the leading semiconductor companies,” TSMC said. Samsung echoed its Taiwanese rival’s comments suggesting that everyone should be able to compete on an even playing field.
According to a Bloomberg report, TSMC also called on the US government to reform the immigration policy. This would attract more foreign talent to the country, helping drive innovation. The Taiwanese firm believes developing advanced technologies to increase competitiveness should be the focus of the Biden administration rather than duplicating the existing supply chain.
The US announces a $52 billion program as it bids to become self-reliant in the semiconductor space
US President Joe Biden last year met with the biggest stakeholders of the semiconductor industry in the White House to discuss the ongoing global semiconductor shortage. To avoid such shortages in the future, Biden wants to boost semiconductor production in the US. His government is already offering huge tax breaks and other incentives to help companies establish factories in the country.
All major semiconductor manufacturing companies have started work on expanding their production capacity in the US. TSMC is constructing a $12 billion factory in Arizona while Samsung has chosen Texas for its $17 billion chip plant. Intel, meanwhile, has announced a $20 billion investment for a chip hub in Ohio and two new plants in Arizona.
The Biden administration has now come up with another lucrative program to strengthen the domestic semiconductor supply chain. $52 billion is a huge amount. It’s no surprise that foreign companies such as Samsung and TSMC would be tempted to get some of those funds. But domestic firms such as Intel don’t seem to be happy about it. It will be interesting to see the US government’s decision on this matter. Intel’s semiconductor manufacturing technology isn’t as advanced as that of Samsung and TSMC. So that could be a major point of discussion. The said federal program could be finalized in May/June, Bloomberg suggests.