In the United States, the semiconductor industry is in full swing while the Biden administration must announce, on March 2, Chips Act grant application rules. The giants of the sector are wondering on the distribution of the envelope the amount of which amounts to $39 billion.
The Chips Act is slowly falling into place
Adopted in August 2022, the Chips Act was designed in an economic environment marked by a global shortage of electronic chips and a way to strengthen American sovereignty in the semiconductor industry. However, since its ratification, the stakes of this legislation have evolved.
During a public speech on February 23, reported by BloombergGina Raimondo, Secretary of Commerce of the United States indicated that the objective of the program was more to strengthen national security than to stimulate the activity of manufacturers of semiconductors, The purpose of this legislation is not to subsidize companies because they are in difficulty in a cyclical slowdown “, she explained, “ it is not to help companies become more profitable in the USA ».
Washington wants the objectives of the legislation to be clear
For the Biden administration, the primary intention of the Chips Act is to break free from dependence on China and Taiwan on the production and import of semiconductors. ” I am expecting that there are many disappointed companies, who feel they should have a certain amount of money “said Gina Raimondo. She adds that ” the reality is that the return on our investment here is the achievement of our national security objective ».
The Chips Act must allow relocation to the United States own state-of-the-art manufacturing technologies while creating an ecosystem for suppliers and researchers in the field. ” United States must design and produce most advanced in the world on its own territory “, she underlined. Today, the components used for US military devices, namely hypersonic weapons, drones or satellites, come mainly from abroad.
$39 billion allocated to semiconductors
Several companies propose their semiconductor manufacturing plant projects in an attempt to obtain grants. Gina Raimondo said she wanted to see the emergence « at least two » new groups capable of producing state-of-the-art chips, in addition to other types of components. These new factories might be partially funded by the Chips Act envelope.
According to the Department of Commerce, relayed by the New York Times, two-thirds of the $39 billion should be allocated to advanced microchip producers like those of TSMC, Samsung or Intel. The remaining third should be donated to other forms of semiconductors, those of everyday electronic devices, in military equipment and in the automobile.
To this sum are added $11 billion dedicated to building semiconductor research centers. Several institutions in the states of Texas, Arizona, Georgia, Indiana, Florida and Ohio have already expressed interest.
The distribution problem
Beyond the question of distribution according to fields of activity there is the issue of distribution between the various players in the industry. Every semiconductor company is testing the waters to find out how much it will receive and how much its competitors get. Interviewed by the New York TimesWilly Shih, a professor of management at Harvard Business School, recalled that this kind of behavior was not surprising. « It’s been a long time since the United States has done something of this magnitude “, he confided, “ the stakes are high ».
One of the biggest challenges of the Chips Act is to share the money widely enough to establish a healthy ecosystem capable of lasting over time. Currently, grants can go up to 3 billion dollars, or even more, per project. American companies in the semiconductor industry await further details on the procedures for applications and on the attribution of the stamp in the coming days.
