U.S. lawmakers propose $22.8 billion to spur construction of chip factories in America

On Wednesday, a bipartisan group of U.S. lawmakers introduced a bill that would provide more than $22.8 billion in incentives for semiconductor manufacturers, aiming to spur the construction of chip factories in America, which can cost upwards of $15 billion to build.

The proposal would create a 40% refundable income tax credit for semiconductor equipment, $10 billion in federal funds to match state incentives to build factories, and $12 billion in research and development funding.

TSMC secures government subsidies and picks site for $12 billion U.S. plant


Chip factories can cost up to $15 billion to build, with much of the expense in the form of pricey tools.

Senators John Cornyn, a Texas Republican, and Mark Warner, a Virginia Democrat, introduced the bill.

While some U.S. firms such as Intel Corp and Micron Technology Inc still make chips in the United States, the industry’s center of gravity has shifted to Asia, where Taiwan Semiconductor Manufacturing Co has more than half of the overall market for contract manufacturing chips and even stronger hold on the most advanced chips. [TSMC’s clients include the likes of Apple, Qualcomm, and Nvidia.]

The dual shocks of the novel coronavirus pandemic, which disrupted chip supply chains, and Beijing’s’ move to strengthen its control over Hong Kong have prompted alarm in Washington over having advanced chip manufacturing concentrated in Taiwan, a U.S. ally across a narrow straight from China, which has spent billions of dollars bolstering its domestic chip manufacturing industry.

TSMC last month said it plans to build a factory in Arizona.

MacDailyNews Take: There is obviously much movement of late to bring critical industries and production back to America.


  1. Very sensible and long overdue that the imlications of giving substantial parts of your vital tech supply to hostile areas of the world purely on the basis of cost savings has been finally recognised. Financing China’s own industrial and by association political and military might while while making yourself more dependent upon their good will and increasing their ability to choke or even eliminate supply of your vital materials altogether was always beyond short sighted.

    1. Yeah, let’s instead pay China to be CLOSER to us. They won’t use that proximity to spy on us AT ALL.

      And I’m sure PAYING China to create competition to Intel in the US isn’t picking winners and losers, right?

        1. Ohhh, right, and Hong Kong is independent, too. 🙂 And, Taiwan is “officially the Republic of China (ROC)”

          We HAVE an American chip foundry. If they’re going to giveaway money to a non-American company, they should give the same amount to an American country.

  2. The price tag of products made in the US will be a bit of a shock. I’m ready to ditch the China crack, but how will I feel when I buy that first US iPh? Getting clean is a lot of work and takes awhile.

  3. No, no, no! It’s a backward approach. Yet again. Do not give even more free billions to billionaires. Give them to consumers, you know, normal people, workers known as Main St. Why? So that they can buy corporate products such as chips in computers, thereby bailing out or subsidizing them by the money that normal people have. It’s like voting with money for the products they, and I, need or want.

    But I know why bipartisan legislators are giving the corporation free Socialist money; It’s because they get kickbacks which they desperately need to finance their repetitive election campaigns. This circle does not stop, ever. Solution? Prohibit big money such as these kickbacks from campaigns and from lobbying, make campaigns publicly financed. Also of help would be to declare that the corporation is not a person and that money is not protected speech.

        1. Taiwan is “officially the Republic of China (ROC)” And, what’s surprising is that you’re fine with giving millions of dollars to foreigners. That’s how we got where we are now.

          1. You seem to think that everybody with slanted eyes is from the People’s Republic of China. There are 24 million independent citizens of Taiwan and 50 million overseas Chinese who owe no political loyalty to Beijing. It is not the case that American Chinatowns are nests of subversion spreading dread diseases to “real Americans.”

            1. Taiwan is “officially the Republic of China (ROC)” And, I might add, TSMC is a foreign entity. You’d prefer giving THEM money and NOT Intel?

              Hong Kong doesn’t owe any political loyalty to China either.

  4. And you don’t think the converse isn’t true? Ask the folks who are reveling in their govt unemployment check, that’s heftier than their actual work paycheck…”would you vote for the people that advocated for the increase?” If ever UBI becomes a reality, wouldn’t it be a fair assumption those receiving would be more likely to vote for the candidates backing the policy?

    I’d guess you’d vote for those politicians giving to the “normal people?” Is getting a vote from a normal voter” any different than a vote from a corp person, IF either is “thanking” by with a vote and the giver of $$ knows this is likely behavior?

    Making it “fair” for someone in the Bernie-way, as I believe you advocate, ALWAYS makes it is so at the expense, or unfairness of another.

    I will say I’m not at all a fan of corp welfare, nor do I advocate special loopholes for such entities. That said, seeing the rich as the enemy just reinvigorates the never helpful policies of class-warfare.

  5. The demise of semiconductor fabrication in the US was a sad but economically inevitable occurence. Commodities (chips) always follow the lowest cost production method. The lifecycle of developing countries creates opportunities to leverage low cost labor which eventually peters out as their affluence increases.

    What I think the US has learned is that maybe chips really aren’t just commodities. They are strategic technologies. China understood this, just like the solar panel market, and vertically integrated it into their lowest-cost production supply system to dominate the market. I haven’t heard much about it, yet, but expect to hear that the US is going restart mining rare earth materials that are used in technology products. China produces virtually all the worlds rare earth supply – 81%. IMHO this is the larger, longer term threat to US technology companies.

      1. One more point I’d like to make is that China’s government has been able to make streamlined strategic decisions because of the way their government is formed. They can strategically choose to steal and undercut other competitors without a lot of governmental debate, as opposed to the US system.

        Until recently the US sat by idly watching markets go to China and malenting the inevitability. China is our adversary (not our enemy) and they aim to keep their economy growing to provide for their immense population. I don’t mean this in any political way, but I am glad the US is woke as to the economic (and other types) threat of China. To compete with them requires that we not only keep up with them, but that we get ahead of them. I get that TSMC is a Taiwanese company, with all the complications of their relationship with China. Bottom line: we do need to protect our national interests and we do need to make sure we have more control of our own destiny. Complacency is not a solution.

  6. Let’s see…about $5B will be eaten up in environmental impact lawsuits, $2B to pay off the unions, $3B for legislator bribes, $1B for “studies” of some kind…

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