Biden Administration Plans Billions in Subsidies for Advanced Chips

The Biden administration's Semiconductor Subsidies Initiative

Biden Administration's Plan

The Biden administration is preparing to offer billions of dollars in subsidies to major semiconductor companies, such as Intel and Taiwan Semiconductor Manufacturing Co. (TSMC), to facilitate the construction of new factories in the United States.

Importance of Subsidies

The subsidies aim to catalyze the production of advanced semiconductors that are integral to powering smartphones, artificial intelligence, and defense systems.

Expected Announcements

The imminent announcements are expected to be disclosed before U.S. President Joe Biden's State of the Union address on March 7.

Beneficiaries of the Subsidies

The subsidies are anticipated to benefit several companies, including Intel, TSMC, Samsung Electronics, Micron Technology, Texas Instruments, and GlobalFoundries.

Projects Underway

Intel has projects underway in Arizona, Ohio, New Mexico, and Oregon with a combined cost exceeding $43.5 billion. TSMC is in the process of constructing two plants near Phoenix, representing a total investment of $40 billion. South Korea's Samsung Electronics has a $17.3 billion project in Texas.

Industry Sources

The top contenders for the subsidies include Micron Technology, Texas Instruments, and GlobalFoundries, as per industry sources cited by The Wall Street Journal.

Department of Commerce's Response

At the time of the report, the U.S. Department of Commerce, Intel, and TSMC had not yet responded to Reuters' request for comment.

Previous Plans

In December 2023, U.S. Commerce Secretary Gina Raimondo had indicated plans to announce approximately a dozen funding awards for semiconductor chips within the subsequent year, encompassing multibillion-dollar allocations that could fundamentally alter U.S. chip production.