Reference News Network January 29** According to the US "Wall Street**" on January 27**, as the election approaches, Biden ** is eager to highlight a landmark economic move, which is expected to provide billions of dollars in subsidies to Intel, Taiwan Semiconductor Manufacturing Co., Ltd. (TSMC) and other major semiconductor companies in the coming weeks to help them build new factories.
The subsidies are part of the $53 billion CHIPS and Science Act, which aims to relocate the production of advanced microchips back to the United States and avoid countries that are rapidly developing their own chip industries, the report said.
The slow implementation of this bipartisan law in 2022 has frustrated some. More than 170 companies have applied, but so far only two modest grants have been made to manufacturers of non-cutting-edge chips.
Industry executives familiar with the negotiations said the upcoming grant is much larger, amounting to billions of dollars, and aims to kickstart the manufacturing of advanced semiconductors that power smartphones, artificial intelligence and ** systems.
The executives expect a portion of the allocation to be announced ahead of the State of the Union address, scheduled for March 7. As the U.S. election campaign heats up, Democrat Biden will seek to showcase his economic achievements in his speech. Former Donald Trump is the frontrunner of the Republican nomination.
William Reinhardt, a senior fellow in technology and innovation at the American Enterprise Institute, a think tank, said: "There is obviously pressure to get funding to big companies before it really starts to heat up. ”
According to the report, the announcement is the first step, which will be followed by due diligence and then a final agreement. Funds will be disbursed in phases as the project progresses.
Some lawmakers and industry** are concerned that these taxpayer-funded factories could take years to produce U.S.-made chips due to licensing and other delays.
Possible recipients include Intel and TSMC. The former's ongoing projects in Arizona, Ohio, New Mexico and Oregon will cost more than $43.5 billion. And TSMC has two chip factories under construction near Phoenix, with a total investment of $40 billion. Arizona and Ohio are considered swing states for this November** and congressional elections.
The CHIPS & Science Act includes $39 billion in manufacturing grants to cover 15% of the total cost of each project, which can be up to $3 billion per manufacturing plant, as well as loans, loan guarantees, and tax credits.
The implementation of the CHIPS and Science Act is an early test of Washington's ability to implement industrial policy – that is, support for strategic industries – where Japan and Germany have more practice.
Honoring iconic economic policies – such as the CHIPS and Science Act and the Inflation Reduction Act, which aims to boost renewable energy – is also an urgent task to push Biden for re-election. The measures are welcome: A survey by the Navigator Research Center last October showed that the CHIPS and Science Act was one of Biden's more popular programs, with 69 percent of respondents saying they supported it.
Overall, voters are dissatisfied with Biden's economic management, the report said. A Wall Street** poll last December found that less than 30 percent of voters supported "Bidennomics" and more than half opposed it.
This gap may be due in part to the time it takes to actually implement these projects. The CHIPS and Science Act's requirements for labor and *** complicate financing negotiations. A shortage of skilled workers is also a problem.
TSMC, which produces about 90 percent of the world's most advanced chips, said last week that it expected to delay production of its second factory in Arizona by one to two years, citing uncertainty over U.S. incentives. TSMC earlier postponed the start of production of its first factory from 2024 to the first half of 2025.
John Fairway, security and technology advisor at Pacific Northwest National Laboratory, said, "If TSMC wants to build factories elsewhere, it can be much faster than in the United States. (Compiled by Zhu Jie).