US boosts support for semiconductor industry

With ambitions to reclaim its global leadership in the semiconductor industry, the US has just finalised nearly 7 billion USD in funding for companies to expand domestic chip production. This support for the US semiconductor industry shows that the technology war between world powers is intensifying.

US President Joe Biden looks at a wafer, as he tours the Intel Ocotillo Campus, in Chandler, Arizona, US, on March 20, 2024.

On December 21, the US Department of Commerce approved a 407 million USD grant for Amkor Technology’s 2 billion USD advanced packaging and testing facility plan in Arizona. This facility could become the largest advanced packaging and testing in the US.

Simultaneously, the US Department of Commerce is finalising support packages of up to 4.7 billion USD for the Republic of Korea’s Samsung Electronics and 1.6 billion USD for Texas Instruments to promote domestic chip production expansion.

For Texas Instruments, the company has committed to investing over 18 billion USD until 2029 to build two new factories in Texas and one factory in Utah, potentially creating more than 2,000 manufacturing jobs.

The company will receive 900 million USD in grants for operations in Texas and 700 million USD in Utah. Meanwhile, Amkor’s new facility in Arizona, when fully operational, will provide packaging and quality control for millions of chips for self-driving vehicles, 5G/6G networks, and data centres. Apple will be Amkor’s largest customer.

Since August 2022, the US Congress has passed a 39 billion USD subsidy programme for the semiconductor industry and related components, along with 75 billion USD in government preferential loans, aiming to lead the world in semiconductor production. The US Department of Commerce has granted 458 million USD in support for SK Hynix’s plant in Indiana.

As for Intel, since March of this year, the US has provided billions of dollars in grants and loans to boost the company’s domestic semiconductor chip production, helping Intel regain its position in the semiconductor industry.

From its dominant position in chip manufacturing and being the largest chip manufacturer in the US by revenue, Intel has now fallen in rank and is struggling to compete in producing chips used for the booming generative artificial intelligence (AI) sector.

Intel’s growing financial troubles risk derailing the government’s ambitious strategy to restore domestic chip production, as Washington considers Intel a crucial link in the plan.

To strengthen Intel as a crucial link in the chip production and supply chain, the US Department of Commerce finalised a 7.8 billion USD subsidy for Intel last month after the California-based chip manufacturer received an additional 3 billion USD award from the Pentagon. Additionally, Intel received loans of up to 11 billion USD, with part of the funding to be used for building two new factories and modernising one factory in Arizona.

In Arizona, Intel is investing over 32 billion USD to build two new cutting-edge chip manufacturing plants and modernise its facility at the Ocotillo campus. This is the largest funding under the CHIPS and Science Act - a crucial law signed by President Biden to strengthen the US semiconductor industry. The US government’s main objective is to reduce dependence on other countries for semiconductor component supply.

In efforts to strengthen the US semiconductor industry’s position, the US government has just finalised an investment agreement of up to 6.2 billion USD in Micron Technology - one of the country’s leading semiconductor companies, helping Micron boost research and production of advanced memory chips within US territory. This investment is part of Micron’s long-term plan, with a total value of up to 100 billion USD over the next 20 years.

Specifically, the company will invest heavily in New York and Idaho manufacturing facilities to create about 20,000 new jobs. According to the US Department of Commerce, the goal is to increase US advanced memory chip production from less than 2% currently to about 10% by 2035. As Micron becomes the only memory semiconductor manufacturer in the US, the company holds a golden opportunity to bring new-generation memory chip production to the nation, helping grow and strengthen the US economy amid increasingly fierce international competition.

Previously, the US produced nearly 40% of global semiconductor chips, but this figure has now dropped to only about 10%, with none of these chips belonging to the most advanced technology group. With these large investments in chip manufacturing, the US is sending a message that they are uncompromising in the technology war with other powers.

The US policy of supporting domestic chip manufacturers and increasing domestic chip production is not only aimed at asserting leadership in the semiconductor industry but is also a strategic move to ensure economic security as President-elect Donald Trump is returning to the White House.

Although current US President Joe Biden and President-elect Donald Trump differ greatly in their views on leadership and governance of the country, the latest move by the US government shows that no matter who is in charge of the White House, the “America First” message continues to be emphasised.

NDO