CHIPS Act: Leading Chipmakers Intel, TSMC, Samsung Seek Over $70 Billion In Subsidies For Setting Up Semiconductor Fabs In U.S

U.S. Commerce Secretary Gina Raimondo has revealed that leading chip behemoths, including Intel, TSMC and Samsung Electronics, have sought over $70 billion in federal funding to set up state-of-the-art- domestic chip manufacturing plants in the country.

Under the CHIPS Act, the U.S. government is offering $39 billion in subsidies for domestic chip manufacturing combined with 25% investment tax credits for costs of manufacturing equipment and another $13 billion for semiconductor research. About $28 billion out of $39 billion is available as incentives for leading-edge chip manufacturing.

"At the outset, we said we would invest about $28 billion of the program's 39 billion (dollars) in incentives for leading-edge chip manufacturing. But I want you to know, that even though that sounds like a lot of money, the leading-edge companies alone have requested more than $70 billion. So that means we have a lot of tough conversations," Raimondo said during her interaction at the Centre for Strategic and International Studies, a Washington-based think tank.

Raimondo said that the subsidy program under the CHIPS Act has received an overwhelming response. 

"Over 600 statements of interest from companies, from the biggest to the smallest, and the brutal realities that a significant majority of those companies expressing interest aren't going to receive funding." she added.

Under the CHIPS Act, the U.S. government has so far approved federal funding for three semiconductor chip manufacturing proposals (BAE Systems, Microchip Technology and GlobalFoundries).

Taiwanese chip giant TSMC is currently building two advanced chip fabrication plants in the U.S. state of Arizona by investing $40 billion. It has been involved in protracted negotiations on the quantum of subsidies but is eventually likely to receive subsidies from the U.S. government.

"What TSMC is contemplating doing in Arizona is pathbreaking," Raimondo said. "They are investing in the United States, and we're grateful that they're doing that, and we're going to make sure it's successful," she said.

U.S. chip behemoth Intel is investing more than $20 billion in constructing two new leading-edge chip factories in Ohio. Intel is reportedly in talks with the U.S. government to finalise more than US$10 billion in subsidies.

Raimondo also expressed confidence that American-made leading-edge chips would "go from zero to 20 per cent" of global production by 2030.

She also reiterated that the U.S. will continue to assist the production of older-generation chips (usually understood as 28-nanometer and larger).

Raimondo also added that the U.S. would leave no stone unturned to ensure that a complete semiconductor supply chain will be built domestically.

"United States can become the home to the entire silicon supply chain for the production of these leading-edge chips – from polysilicon production, to wafer manufacturing, to fabrication, to advanced packaging. That's the game, by the way." she said