The CHIPS and Science Act, signed into legislation by President Joe Biden in August 2022, has been in place for over two years. While firms like Intel and Microchip have progressed with incentive agreements and funding plans, their experiences underscore the Act’s difficult and complicated implementation course of.
The CHIPS Act has drawn world semiconductor leaders, together with TSMC, Samsung Electronics, Intel, GlobalFoundries (GF), SK Hynix, and Micron, to commit vital investments in increasing US manufacturing. With incentives like subsidies, loans, and tax breaks, the Act goals to cut back monetary pressures on these large-scale tasks.
A May 2024 report from Boston Consulting Group (BCG) and the Semiconductor Industry Association (SIA), cited by Bloomberg, tasks US wafer fab capability will triple by 2032, reaching the quickest world progress over the last decade. Its world capability share may climb from 10% to 14%, however with out the CHIPS Act, this determine would possibly fall to eight%. However, vital dangers accompany this funding surge.
Uncertainty looms over Intel and US semiconductor coverage
Donald Trump’s victory within the November presidential election raises considerations about potential shifts in US semiconductor coverage beneath the brand new administration in 2025, casting uncertainty on firms’ willingness to pursue deliberate investments.
Intel, the only US agency with superior semiconductor manufacturing capabilities, was poised to guide home provide chain revitalization. However, its foundry division—key to its IDM 2.Zero technique—stays deeply unprofitable. CEO Pat Gelsinger, the architect of IDM 2.0, has stepped down amid widespread layoffs and management turmoil.
Intel has secured as much as US$7.865 billion in CHIPS Act subsidies, however the funds, tied to incremental milestones, are unlikely to resolve its monetary woes. Doubts persist over the corporate’s capability to ship on its multi-billion-dollar growth plans amid ongoing challenges.
Microchip’s withdrawal highlights CHIPS Act hurdles
In January 2024, Microchip introduced a non-binding Preliminary Memorandum of Terms (PMT) with the US authorities to safe US$162 million in subsidies for increasing microcontroller manufacturing and different mature-node semiconductor applied sciences.
Amid vital income declines, Microchip introduced again Steve Sanghi as interim CEO in November 2024. Sanghi, identified for main the corporate to 121 consecutive worthwhile quarters from 1991 to 2021, changed Ganesh Moorthy to…
