Intel has reportedly questioned US's CHIPS Act, claiming that the company should get a larger share from the likes of Samsung and TSMC.
Intel Demands More Share in CHIPS Act, Claiming That The Company is More US-Oriented
Knowing about the CHIPS Act becomes necessary before we go into the crux of the matter. It is an incentive by the US government provided to companies in the semiconductor industry. The benefits include $280 billion in grants, including $52 billion in federal investments and tax breaks for domestic semiconductor research, design, and manufacturing provisions. The US government aims to encourage semiconductor production in the country, ultimately reducing its reliance on Taiwan and China.
Intel urges to increase its share in the legislation primarily due to its influence in China. Based on a statement given by Intel's CEO Pat Gelsinger, who spoke at the Aspen Security Forum 2023 in July, it seems like the company is potentially putting its business at stake here by siding with the US. The remarks from the analyst Paul Triolo, clearly depict the situation, claiming that Intel is bound due to the trade restrictions imposed by the US.
On one hand, they [Intel] are being asked to invest billions in advanced fab construction in the U.S. to onshore manufacturing, investing at least $30 billion before they generate any revenue in the U.S. from these new facilities.
On the other, the U.S. Department of Commerce is prepared to slap further controls on Intel’s ability to ship commodity semiconductors to China that could significantly cut into its already-reduced revenue from the China market—in essence, a major double whammy.
Analyst Paul Triolo vie EETimes
On the other hand, Intel's CEO states that the company focuses on establishing its R&D facilities in the US, claiming that competitors such as Samsung and TSMC have most of their R&D work done in offshore facilities. A prime example is TSMC's plans to produce cutting-edge 2nm technology in Taiwan, which prevents the technology transfer into the US. At the same time, Intel stays committed, claiming they are building five different facilities in the US, with plans to produce mass manufacturing of next-gen nodes.
We recently reported a meeting amongst the US government and tech behemoths such as Samsung, Intel, and Qualcomm, all voicing to ease the trade policies with China. We can't argue that right now, China is in a more dominant position regarding its vast industry potential, mainly due to the recent AI boom. With that said, many companies fear compromising their businesses just to comply with US policies which, in the end, won't benefit them in the long run.
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