Chip makers warn Congress’ delay could threaten U.S. expansion

Gartner’s Gupta said with the $52 billion provided by the CHIPS Act, the federal government can start funding individual chip foundry projects from companies, which would help close the cost gap with Asia.

A source at another major chipmaker says the issue remains vital to national security given that the U.S. is increasingly reliant on manufacturing from Asia, especially Taiwan.

“Commerce Secretary Raimondo calls it a crisis and she is right,” the source said. “If you want to ensure U.S. national security, you need to manufacture the best chips here. That won’t happen if the (funding) doesn’t pass.”

We need to make more chips in the United States. Manufacturers want the federal government to pay up.

Is this a good policy?

That is a tough question. I agree we need chip manufacturer here. But at what cost? We could never compete against their labor and environmental laws. Are we okay with federal subsistence for it and how much. Definitely against it being run by government, politics would get in way of best practices and viable uses, favorites would be chosen quickly with no regard to usefulness.

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it’s be nice if we had an administration that helped incentivize such industries here

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It can be, with very careful execution. Which government is not good at.

Step 1 - Stop pissing away money in Ukraine.

Labor: I agree. We never could. Maybe we need to get back to beating them on quality.

Environmental Laws are an issue in chips? I honestly don’t know. The EPA can have it’s neck wound in, luke Trump was doing. These green idiots need to be ignored.

Back in the 1970’s all the chips were made using some pretty harsh chemicals. And there were few regulations regarding what could be put down the drain or up in the air. California was the first state to crack down with regulations which caused a lot of chip makers to build fabs in other states and/or countries that didn’t have those restrictions. In the 1980’s part of the industry started using water based chemistry which helped. Although there was a segment of the process that still required some nasty chemicals and gases. So the cost of labor is a major factor, but also the cost of the additional equipment required to meet environmental standards. And those regulations should not be ignored. The processes use some really nasty ■■■■■

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Don’t see why cheaper tax breaks couldn’t have accomplished the same thing. I would also probably try appealing to those companies patriotism while reminding them of their current lucrative federal contracts for free first. Maybe cancel a few contracts if they balked. But my career was business, not politics. Seems to work pretty well to get social media companies to censor on governments behalf.

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Is this a concern in our Asian competitors? If it guarantees a steady domestic supply, is a little bit of political sleeze too high a price?

Is there still time to be careful?

If you somehow knew that Taiwan will get run over in the next ten or twenty years, does that change your willingness to write these checks?

The EU is starting to hustle. Should we?

We have set ourselves the goal to have, in 2030, 20% of the global market share of chips production, here in Europe. Right now, we are at 9%, we want to go to 20% in 2030. But knowing that the demand in the global market will double during that time, it basically means quadrupling our efforts. The European Chips Act will back this ambition with considerable investment. It will enable EUR 15 billion in additional public and private investment until 2030. This comes on top of EUR 30 billion of public investments that we have already planned

Yes…because they are paramount to our economic existence and to even be in this position shows the limited vision of those leading.

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If…any product produced is manufactured in a process that does not meet our environmental laws, should be prohibited from being sold or used here in the US.

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Yes. See step 1.

Gelsinger noted that the manufacturing subsidies for each $10 billion plant in the Ohio complex would be capped at $3 billion. And he said these subsidies are based on the reality of government incentives around the world for chip plants, which led the U.S. to lose its lead.

If Intel builds a new plant in Europe, India, South Korea or China, the plants can be subsidized at a range of 30% to 50% (to even 70% in China).

“That’s real dollars and it is not economically viable when everyone else in the world is seeing that reduction,” Gelsinger said. “We are not competing with TMSC or Samsung. We are competing with Taiwan and Japan and Korea.”

The CHIPS Act cap of $3 billion per fab would make the Intel plants “approximately competitive with other regions of the world,” he said. “We’re not looking for handouts,” he added.

It’s amazing that he doesn’t see it as a handout just because other countries give bigger handouts.

Taiwan’s biggest semiconductor manufacturer has started building a computer-chip factory in Arizona and is hiring U.S. engineers and sending them to Taiwan for training, but the pace of construction will depend on Congress approving federal subsidies, a Taiwanese minister said Tuesday.

"TSMC has already begun their construction in Arizona, basically because of trust. They believe the Chips Act will be passed by the Congress,” Ming-Hsin Kung, minister of Taiwan’s National Development Council and a TSMC board member, said in an interview in Washington, D.C.

This whole process is a very transparent look at what it takes to bring foreign manufacturing to the United States. The chip industry is speaking with a unanimous voice, telling us what they need.

What they want.

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Seems like all of them want handouts, and thought the chips act was certainly going to pass.

Sure they do. And I support helping them; with what they need. Not what they want.

Several U.S. semiconductor firms are deliberating whether to oppose a package of chip industry subsidies if the final language of the legislation awaiting a vote in the Senate disproportionately benefits manufacturers like Intel, sources familiar with the matter told Reuters.

Intel, along with firms like Texas Instruments and Micron Technology, designs and manufacturers its own chips. Such firms would benefit from the $52 billion in CHIPS Act subsidies to build factories and also from an investment tax credit to purchase tools for use inside their factories from another measure called the FABS Act.

While AMD and NVIDIA are U.S.-based and design their own microprocessors, they contract outside firms like TSMC and Samsung to produce their chips. As a result, they wouldn’t be able to reap the full benefits of the $52 billion windfall from the U.S. government.

“You have Intel that might get $20 billion with CHIPS Act plus $5 billion or $10 billion under the FABS Act. So $30 billion goes to your direct competitor, and you don’t get a penny? That’s going to cause problems in the market,” said one person at a company debating opposition to the bill, speaking on condition of anonymity because the person was not authorized to talk to the press.

Good. The bill should favor making chips on US soil. Get with the program.

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We have a carbon fiber plant nearby that’s byproduct is cyanide gas. We’ll make chips beside that plant.

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It’s not a hand out in the sense we aren’t doing it to benefit them, we would be doing it for national security purposes.

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