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ICYMI: Three Companies Warn About Delayed Chip Funding As GlobalWafers Announcement Hinges On Bipartisan Innovation Act Passage

Jun 29, 2022

ICYMI: Three Companies Warn About Delayed Chip Funding As GlobalWafers Announcement Hinges On Bipartisan Innovation Act Passage
Wed, 06/29/2022 – 15:48



Wednesday, June 29, 2022

Office of Public Affairs

This week, TSMC, Intel and Global Foundries all issued public warnings that continuing to delay chipmaking incentives could cause them to scale back their plans to make semiconductors in the U.S. Their announcements come days after GlobalWafers announced a CHIPS Act-dependent multi-billion investment that will fill a hole in the U.S. chip manufacturing supply chain.

Congress continues to make progress towards a bipartisan agreement, but chipmakers are looking to finalize construction plans before the fall while countries in Europe and Asia have already provided billions of dollars worth of incentives.

Last week, Intel ‘indefinitely delayed’ construction of its $20 billion investment in making chips in Ohio. Earlier this month, Micron told the New York Times that failure to pass the Bipartisan Innovation Act this summer could jeopardize its U.S. expansion plans.

Here’s what chipmakers are saying about the high-cost of delay:


Washington Post: Taiwan official calls for approval of U.S. computer chip subsidies

Taiwan’s biggest semiconductor manufacturer has started building a computer-chip factory in Arizona and is hiring U.S. engineers and sending them to Taiwan for training, but the pace of construction will depend on Congress approving federal subsidies, a Taiwanese minister said Tuesday. The message follows similar calls from U.S. chip manufacturers Intel and GlobalFoundries, which last week said that the delay in passing the subsidy legislation is slowing their investments in new factories in Ohio and New York.

Global Foundries

Washington Post: 2 huge chip makers warn of expansion delays as subsidies bill languishes

“The CHIPS Act makes the U.S. semiconductor industry more competitive globally. For GlobalFoundries, the passing of CHIPS funding would affect the rate and pace at which we invest in expanding our U.S. manufacturing capacity,” Steven Grasso, GlobalFoundries’ managing director of global government affairs, said in an email. “The rest of the world is moving rapidly despite the inability of Congress to get this finished,” said Gelsinger on a panel at the Aspen Ideas Festival.


Fortune: Intel CEO threatens to expand in Europe over U.S. if Congress doesn’t unlock funding for new $20 billion Ohio chip plant

Intel CEO Pat Gelsinger warned Tuesday that he may expand chip production in Europe instead of the U.S. if Congress fails to approve $52 billion in government subsidies promised under the CHIPS Act.


Wall Street Journal: Taiwan Company Plans Texas Chip Wafer Factory—if Congress Approves Incentives

(…) Commerce Secretary Gina Raimondo said the situation points to the urgent need to pass the legislation, noting that South Korea, Japan and members of the European Union are all offering hefty subsidies to ensure stable supplies of chips that power consumer, industrial and military products amid a global shortage. “We are really at a tipping point right now in the semiconductor supply chain,” Ms. Raimondo said. “Either the United States is going to be a big winner in that we’ll be able to attract a number of companies,” Ms. Raimondo said, “or, if Congress doesn’t pass the Chips Act in the next few weeks, then the United States will be a big loser because these companies will go to other countries.”

CNBC: U.S. may lose silicon wafer factory if Congress can’t fund CHIPS Act, commerce secretary says

U.S. Commerce Secretary Gina Raimondo told CNBC’s Jim Cramer on Monday that she believes GlobalWafers will follow through on its plan to build a silicon wafer factory in Texas — but only if Congress passes funding for the CHIPS for America Act by the time the August recess begins. “This investment that they’re making is contingent upon Congress passing the CHIPS Act [funding]. The CEO told me that herself, and they reiterated that today,” Raimondo said in an interview on “Mad Money.” “It has to be done before they go to August recess. I don’t know how to say it any more plainly. This deal … will go away, I think, if Congress doesn’t act,” she added. GlobalWafers, a Taiwan-based semiconductor silicon wafer firm, said Monday that it plans to build a facility to produce the component in Sherman, Texas. The facility could create up to 1,500 jobs and produce 1.2 million wafers a month, according to the U.S. Commerce Department.

Reuters: U.S. commerce secretary presses lawmakers to greenlight $52 bln for chipmaking

U.S. Commerce Department Secretary Gina Raimondo on Monday stepped up pressure on Congress to approve $52 billion in funding for chipmakers to expand operations, warning that firms would abandon American expansion plans without the legislation. “Mark my words … if Labor Day comes and goes and this Chips Act isn’t passed by Congress, these companies will not wait and they will expand in other countries,” she warned in an interview on CNBC. Both houses of Congress have passed versions of legislation to make the United States more competitive with China that include the chip funding. However, lawmakers have so far failed to reach consensus on a final version of the sprawling package, despite a global chip crunch. Raimondo’s warning came after Taiwan’s GlobalWafers (6488.TWO) announced plans earlier on Monday to build a $5 billion plant in Sherman, Texas to produce the silicon wafers needed for chipmaking. Raimondo said the company’s CEO told her the investment was contingent on Congress approving the funding.

Bloomberg: Taiwan’s GlobalWafers to Build $5 Billion Chip Plant in Texas

(…) The investment will total $5 billion, the White House said in a statement, confirming an earlier Wall Street Journal report. Speaking at an investment summit Monday, Commerce Secretary Gina Raimondo said the US currently produces 10% to 12% of the world’s microprocessor chips, down from nearly 40% in earlier years. “We took our eye off the ball,” the secretary said. “We stopped investing in chip manufacturing and chip R&D. And, in search of cheap labor, we watched a lot of our manufacturing leave our shores.”

Fortune: Chip makers are refusing to build new semiconductor plants in the U.S. unless Congress unlocks $52 billion in funding

The world’s third largest maker of semiconductor wafers, Taiwan’s GlobalWafers, announced plans to build a $5 billion factory in the U.S. on Monday—but only if the government helps pay for it. “This investment that they’re making is contingent upon Congress passing the CHIPS Act. The [GlobalWafers] CEO told me that herself, and they reiterated that today,” U.S. Commerce Secretary Gina Raimondo told CNBC, the same day GlobalWafers announced its development plan.

Protocol: Critical infrastructure in critical condition

(…) Politicians around the country have been talking about reviving U.S. chip manufacturing for a couple of years now. The chip giants themselves have trumpeted their contribution to the effort with factory expansion plans that are measured in the tens of billions of dollars. But it’s pretty hard to print a chip without a wafer, and the U.S. doesn’t make a lot of them anymore. That’s why GlobalWafers’ announcement Monday about building a new wafer factory in Sherman, Texas, caught our attention. Taiwan-based GlobalWafers said the new $5 billion plant will produce 1.2 million wafers a month, and begin shipping products in 2025. The factory would be the first new wafer production facility built in the U.S. in 20 years, and would have enough capacity to cover all of the planned new fabrication facilities announced by the likes of TSMC, Intel and Samsung.

The Register: To Washington’s relief, GlobalWafers to spend $5 billion on Texas plant

(…) “We are at a make-or-break moment to expand domestic semiconductor production,” said Raimondo. “Semiconductor firms need to make investment decisions by the Fall to meet the enormous increased demand for chips.” GlobalWafers has claimed the semiconductor plant will be the first of its kind built in the US in over twenty years. According to Reuters, Raimondo said GlobalWafers’ CEO told her the firm’s Texas investment was contingent on Congress approving the funding.


Secretary Gina Raimondo

Read the full report from the U.S. Department of Commerce: Read More