Welcome to Zhuoliou industry co.,ltd

Intel is expected to receive billions of dollars in subsidies

10/29/2022 10:46:15 AM

US veteran chip manufacturer Intel (INTC. US) is in talks with the Biden administration to obtain over $10 billion in chip manufacturing subsidies. Last Friday, some media reported, citing sources familiar with the matter, that this massive chip manufacturing subsidy plan may include loans and direct funding, and negotiations on some details between the two sides are still ongoing.

It is understood that these subsidies come from the Chips and Science Act introduced by the Biden administration in 2022. According to the subsidy details, the bill proposes to allocate up to $39 billion in direct funding subsidies, as well as $75 billion in special loans and loan guarantees, to help chip companies build more chip factories in the United States, build the United States into a chip manufacturing powerhouse, and achieve the Biden administration's expectation of "high-end manufacturing industries such as chips returning to the United States.".

The Chip and Science Act introduced by the Biden administration in 2022 aims to expand the manufacturing capacity of high-end chips in the United States, especially high-performance chips with 5nm high-end processes, in order to comprehensively enhance the competitiveness of the United States in the global chip manufacturing field and reduce dependence on external supply chains.
Intel, the American IDM model chip manufacturing giant, is considered by most Wall Street analysts to be most likely to receive high government subsidies. Intel and the US Department of Commerce declined to comment on the insider information cited by the media. Insiders also stated that it is currently unclear how the subsidies received by Intel will be allocated between direct funding subsidies and special loans.

The chip companies in the IDM model have three core capabilities: chip design, chip manufacturing, and chip packaging and testing. They are also the chip companies with the highest technology threshold, capital consumption, and risk coefficient in the global chip industry chain. Samsung Electronics and Intel are the top IDM chip companies in the world. TSMC is mainly responsible for the core link of chip manufacturing, which belongs to the Foundry model in the chip industry chain.

According to information released by the Ministry of Commerce, although there is no upper limit on the total amount of funds that any company can apply for, it is expected that the subsidy will account for 5% to 15% of the capital expenditure of chip manufacturers. For Intel, this means that its factory projects in Arizona and Ohio may receive subsidies ranging from $2.5 billion to $10.5 billion. According to insiders, the Biden administration may default to prioritizing American companies, and it is expected that Intel has applied to invest over $50 billion in chip manufacturing projects in the United States, which could bring the total amount of subsidies and loans it receives to approximately $17.5 billion.

Semiconductor manufacturing giants such as Samsung Electronics and TSMC are also expected to receive high subsidies

According to media reports at the end of last month, the Biden administration is expected to provide billions of dollars in subsidies to leading chip manufacturing companies such as Intel, TSM. US, Samsung Electronics, Micron Technologies (MU.US), and others in the coming weeks to build new factories in the United States.
The media reported at the time that the details of this high subsidy were expected to be announced before President Biden's State of the Union speech on March 7th local time. However, another media report indicated that the specific time may be around the end of March. According to media reports citing sources familiar with the situation, some executives in the US chip industry have indicated that American analog chip leader TXN. US and renowned chip manufacturer Global Foundries (GFS. US) may also receive subsidies.

In August 2023, one year after the signing of the Chip and Science Act into law, US President Biden and Biden administration advisors have repeatedly praised the significant achievements of the bill, including more than 460 companies with significant positions in the global chip industry submitting letters of intent to apply for funding.

Samsung Electronics is building a chip factory in Taylor, Texas, with a cost exceeding $25 billion, far higher than the initial forecast (an increase of over $8 billion from Samsung's initial forecast). This is mainly due to sustained inflation in the United States leading to an increase in construction costs. Samsung plans to complete factory construction in 2024 and begin producing advanced process chips below 5nm in 2025. The factory will create approximately 2000 high-end chip manufacturing positions.

TSMC's chip factory construction in Arizona, USA is progressing rapidly and is expected to cost $40 billion, despite delays in project initiation due to a shortage of skilled workers and reported union disputes. TSMC plans to begin production at its Phoenix factory in the first half of 2025.

TSMC stated that the chip factory has received strong support from local, state, and federal governments, and is developing positive relationships with local trade and union partners, as well as making good progress in addressing issues related to factory infrastructure, utilities, and equipment installation. TSMC has also made early preparations for the operation of its Arizona factory and has hired nearly 1100 local employees in the Phoenix area.
It is understood that the chip factory in Arizona, USA is one of TSMC's largest investments in the US market. It is expected to produce the most advanced 3nm or 2nm chips for various high-tech applications, from artificial intelligence to 5G and mobile devices.

Tags:

Prve：The world's first 3nm computer chip is here!

Next：PC chip counterattacks Apple and Intel