Biden Administration to Award Billions in Subsidies to Boost U.S. Semiconductor Manufacturing

In a bid to bolster domestic semiconductor manufacturing and enhance the nation’s technological prowess, the Biden administration is poised to announce the allocation of billions of dollars in subsidies to leading semiconductor companies, including Intel and Taiwan Semiconductor Manufacturing (TSMC). The subsidies are aimed at supporting the construction of new semiconductor factories within the United States, according to a report by the Wall Street Journal on Saturday.

The upcoming announcements are expected to jumpstart the production of advanced semiconductors crucial for various applications, including smartphones, artificial intelligence, and defense systems. Industry executives familiar with the negotiations revealed to the WSJ that these announcements could be disclosed prior to President Joe Biden’s State of the Union address scheduled for March 7.

Among the primary beneficiaries of the subsidies, Intel is reportedly engaged in projects across multiple states, including Arizona, Ohio, New Mexico, and Oregon, with a combined investment exceeding $43.5 billion. Meanwhile, Taiwan Semiconductor Manufacturing (TSMC), another potential recipient, is actively involved in the construction of two plants near Phoenix, Arizona, with a total investment of $40 billion. South Korea’s Samsung Electronics is also in the running, with a $17.3 billion semiconductor project in Texas. Other contenders include Micron Technology, Texas Instruments, and GlobalFoundries, as cited by industry executives.

The Wall Street Journal’s report suggests that the subsidies are part of a broader strategy to reduce the nation’s reliance on foreign semiconductor production and ensure a stable supply chain for critical technologies.

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The U.S. Department of Commerce, however, remained tight-lipped about potential applicants and the timing of the subsidy announcements. A spokesperson for the department emphasized the merit-based nature of the process, stating, “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.”

The subsidies are expected to play a crucial role in addressing the global semiconductor shortage that has affected various industries, including automotive and consumer electronics. By incentivizing major semiconductor companies to invest in U.S.-based manufacturing facilities, the Biden administration aims to strengthen the nation’s economic and national security in the rapidly evolving landscape of technology and innovation.

Source: Reuters