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Developing chip manufacturing is very expensive, with investment ranging from tens to tens of billions of dollars. In order to attract more semiconductor giants to develop chip manufacturing in the United States, the United States plans to use US$52 billion as chip subsidies.
Regarding this subsidy, it has remained at the discussion stage and has not gone further. And now there is new news from the United States, may the subsidy amount be reduced? If chip subsidies fail to meet the requirements, is it feasible to promote the chip manufacturing industry?
U.S. chip subsidies add another variable, or the amount may be reduced
The United States has experienced the glory of the chip manufacturing industry. At its peak more than ten years ago, the U.S. chip production capacity accounted for about 42% of the world's total, ranking first in the world. , almost all chip electronic products on the market come from the United States.
Intel , GlobalFoundries , Texas Instruments and other US manufacturing giants are leading the times and blooming with dazzling brilliance.
has also given birth to a batch of influential figures in the field of integrated circuits, including Intel founder Gordon Moore and integrated circuit inventor Jack Kilby . Even Zhang Zhongmou, the founder of TSMC, the world's largest chip manufacturer, once worked for Texas Instruments.
But that era has passed. Although the former giants have reached the present, they no longer have the style of the past. The leading semiconductor giants are just chip design companies. In terms of manufacturing, they need to rely on OEMs such as TSMC, , and Samsung .
Due to its reliance on overseas factories for OEMs, the production capacity of the US chip manufacturing industry has declined. There is no corresponding talent, and the supply chain advantage seems to be sluggish.
The United States, aware of the problem, plans to spend 52 billion US dollars to change everything. This money will be used to provide subsidy support to semiconductor companies that come to the United States to build factories. At the same time, local chip manufacturers Intel, GlobalFoundries and other companies hope to receive subsidies as long as they have corresponding semiconductor construction projects. The
plan cannot keep up with changes. The United States discussed the topic of chip subsidies a year ago, and the US$52 billion quota was determined early. The only thing that makes chip manufacturers dissatisfied is that the money has not been approved for allocation, which means that all discussions are just discussions.
In order to get this money as soon as possible, Intel has repeatedly urged the United States to pass this chip subsidy bill, otherwise it will build factories in Europe. It seems that Intel's urging has had an effect. There is new news from the United States about the US$52 billion chip subsidy, but the result may not be what Intel wants to see.
US chip subsidies have added another variable. According to reports, the US is trying to cut US$52 billion in subsidies.
The United States cannot afford US$52 billion, so is it cutting subsidies? This possibility cannot be ruled out. If there were sufficient finances, the subsidy might have been implemented long ago and it would not have been delayed until now.
Now that the news of subsidies has come, it has surprised the chip manufacturers who have been waiting hard. Once subsidies are really cut, it means that the amount of subsidies they receive will also be weakened. It could range from tens of millions of dollars to hundreds of millions or billions of dollars.
If chip subsidies cannot meet the requirements, is it possible to promote the chip manufacturing industry?
TSMC officially went to the United States to build a factory during 2021 and started the construction of a 5nm factory in Arizona, USA. It is expected to be put into production in 2024. Intel also has a chip factory under construction in Arizona, and while the United States is considering providing subsidies, it has invested $20 billion to build a factory in Ohio.
It’s just that this factory has been postponed due to subsidies, and it is still unknown when it will start construction.
The United States naturally hopes that chip manufacturers will step up factory construction to bring more chip production capacity. But there is no free lunch in the world. If you want to get the benefits, you have to pay something. The cost of building a factory in the United States is very high. Without subsidies, it is no different than working for nothing.
If the chip subsidies in the United States fail to meet the requirements, is it still possible to promote the chip manufacturing industry? This probably depends on the final amount of chip subsidies provided by the United States. Let’s see if it’s a cut of billions of dollars or tens of billions of dollars.
But no matter how much the reduction is, the industrial construction effect brought by every penny may be different. Some manufacturers may spend several years going all out for tens of millions of dollars in subsidies.
is just like when Foxconn invested US$10 billion to build a factory in the United States, but ultimately received only US$30 million in subsidies. An investment of US$10 billion in exchange for a subsidy of US$30 million is worth it. Only the company itself knows whether it is worth it.
However, Foxconn is building an LCD factory, which is very different from the chip manufacturing industry. Therefore, the subsidy amount pursued by TSMC and Intel must be more than tens of millions, and it is estimated to be several billions of dollars.
You must know that TSMC will receive a subsidy of US$3.5 billion from Japan when building a 22nm mature chip factory in Japan, accounting for 43% of the total investment. It is impossible for the United States to provide subsidies for half of TSMC’s investment. Based on TSMC’s investment of US$12 billion to build a factory in the United States, the possibility of the US subsidy of US$6 billion is extremely slim.
What's more, the United States may cut subsidies. How much financial support TSMC can receive by then depends on the other party's wishes.
Summary
There is news that the United States plans to reduce the amount of subsidies, but this news is still in its early stages. Not to mention it has been reduced, it is not known whether actual subsidies can be obtained. There has been so much discussion. If it is just a blank check, wouldn’t the chip manufacturers’ work be in vain? Instead of making groundless speculations, let us wait and see what happens.
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