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In It to Win It
In It to Win It's Journal
In It to Win It's Journal
October 30, 2021
Chip makers are threatening to scrap future US factories without generous tax breaks
Quartz The worlds largest semiconductor manufacturersIntel, Samsung, and the Taiwan Semiconductor Manufacturing Company (TSMC)have all announced plans to build new chip factories in the US. Everyone is bragging about those plans: American lawmakers say bringing chip manufacturing back onto US soil will strengthen national security, while the chip makers, chastened by this years disastrous semiconductor shortage, are diversifying their supply chains to avoid future crises.
But theres one problem: Who will pay?
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To ratchet up the pressure on US lawmakers, Intel has threatened to scrap plans to build two Arizona chip plants unless Congress passes the CHIPS Act promising $52 billion in subsidies for domestic semiconductor manufacturing. The bill is currently stalled in the House. We arent going to be able to do that without CHIPS funding, Intel government relations head Al Thompson told Bloomberg.
TSMC made similar threats before breaking ground on a new $12 billion plant in Arizona, which it intends to fund, in part, with money from the CHIPS Act. Subsidies will be a key factor in TSMCs decision to set up a fab in the US, TSMC chairman Mark Liu told Bloomberg in 2020. Our request is that the state and federal governments together make up for the cost gap between the US and Taiwan.
Samsung has made its own plans for a new cutting-edge $17 billion factory in the US contingent on subsidies. The company tentatively named Arizona, New York, and Texas as potential sites for the new factory. But in a June regulatory filing with the Texas comptrollers office, Samsung made clear that tax breaks are a determining factor in its location decision. If Texas doesnt cough up satisfactory tax breaks, Samsung wrote, the company would likely locate the project in Arizona, New York, or [South] Korea.
But theres one problem: Who will pay?
-
To ratchet up the pressure on US lawmakers, Intel has threatened to scrap plans to build two Arizona chip plants unless Congress passes the CHIPS Act promising $52 billion in subsidies for domestic semiconductor manufacturing. The bill is currently stalled in the House. We arent going to be able to do that without CHIPS funding, Intel government relations head Al Thompson told Bloomberg.
TSMC made similar threats before breaking ground on a new $12 billion plant in Arizona, which it intends to fund, in part, with money from the CHIPS Act. Subsidies will be a key factor in TSMCs decision to set up a fab in the US, TSMC chairman Mark Liu told Bloomberg in 2020. Our request is that the state and federal governments together make up for the cost gap between the US and Taiwan.
Samsung has made its own plans for a new cutting-edge $17 billion factory in the US contingent on subsidies. The company tentatively named Arizona, New York, and Texas as potential sites for the new factory. But in a June regulatory filing with the Texas comptrollers office, Samsung made clear that tax breaks are a determining factor in its location decision. If Texas doesnt cough up satisfactory tax breaks, Samsung wrote, the company would likely locate the project in Arizona, New York, or [South] Korea.
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