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.
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.