CHIPS Act could see Intel take lion’s share, with TSMC Arizona plant a lower priority

CHIPS Act could see Intel take lion’s share, with TSMC Arizona plant a lower priority

August 1, 2022 0 By Ben Lovejoy

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The scale of subsidies for the TSMC Arizona plant are in doubt as it becomes clear that the $52B CHIPS Act grants won’t go far, and Intel is angling to take the largest slice of the pie.

TSMC has previously said that the subsidy for American chip manufacturing was “vital” to its Arizona plant, which has been expected to begin US production of Apple’s A-series and M-series chips from 2024 …

Background

The Senate last year approved $52B in funding to boost US chip production, with the House adding its support in February of this year. The motivation was two-fold. First, to address the global chip shortage which arose during the pandemic. Second, a desire to ensure that the US isn’t left behind by China.

Apple lobbied for the cash, which TSMC said was “vital” to its Arizona chipmaking plant.

The CHIPS Act turned into the CHIPS and Science Act, after additional funding was added for broader scientific, education, and defense spending.

TSMC Arizona plant may not be a priority

The Financial Times reports that while the funding is now pretty much secure, the next battle will be to decide who gets what.

The financial support from Washington is unlikely to stretch across all the giant projects already under construction or on the drawing board in the US.

“It’s not as big as everyone thinks,” said Pat Moorhead, a US chips analyst. With advanced chip manufacturing plants costing more than $10bn, the Department of Commerce, which will be responsible for deciding who gets the money, will face some difficult choices, he said.

In particular, Intel is hoping to get the largest award, accounting for almost a third of the total available.

Intel alone hopes to secure […] nearly a third of the total, for two fabs under construction in Arizona – and two more for which it is close to breaking ground in Ohio […]

Although Congress has agreed to make the grants available to foreign companies, domestic chipmakers are lobbying hard to make sure the lion’s share of the money goes to American companies. An executive at one US chipmaker said that the commerce department should favour companies that carry out their R&D in the US and employ the largest number of workers there things that would clearly favour American companies.

If the aim is to ensure that US chipmakers get up to speed with the far more advanced capabilities of players like TSMC and Samsung, then Intel would need all the help it can get. It’s been lagging well behind in its technology, lost Apple as a customer, and recently announced poor quarterly earnings and said that it would be cutting its capital spending by $4B this year. That scale of cut would leave it struggling even harder to compete with more advanced chipmakers.

Apple’s chipmaker will, though, be fighting its corner. While the construction of the TSMC Arizona plant is well advanced, the company has said that the project was proving more expensive than anticipated, and has indicated that subsidies could determine the pace of development there.

Photo: Lisa Campbell/Unsplash

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About the Author



Ben Lovejoy

Ben Lovejoy is a British technology writer and EU Editor for 9to5Mac. He’s known for his op-eds and diary pieces, exploring his experience of Apple products over time, for a more rounded review. He also writes fiction, with two technothriller novels, a couple of SF shorts and a rom-com!

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