Chipmakers are requesting US subsidies worth over $94 billion.

US Commerce Secretary Gina Raimondo announced on February 26 that companies that manufacture the most sophisticated semiconductors have applied for federal subsidies totaling more than US$70 billion (S$$94 billion), or nearly twice the amount of financing that is available. The US government is providing US$39 billion in subsidies to corporations to encourage them to make more of the tiny chips that power everything from vehicles and fighter aircraft to smartphones in an attempt to revive local semiconductor manufacturing. The money is intended to fortify the US supply chain and lessen the nation’s dependency on imports of chips. At the moment, only 12% of chips are produced in the United States.


Thus far, companies have shown a strong interest in the grants. Speaking at the Centre for Strategic and International Studies on February 26, Ms. Raimondo reported that her department had received over 600 expressions of interest. According to Ms. Raimondo, the US has had to be “tough with companies,” and she has pressured business leaders to “do more for less.” She also mentioned that officials will “have to say no to excellent companies” due to the quantity of interest. Ms. Raimondo emphasized the necessity of increasing home manufacture of the most cutting-edge chips, which are mostly produced in Taiwan.


According to Ms. Raimondo, the US intends to give approximately US$28 billion of the funding to companies that produce these cutting-edge chips. These semiconductors, which are made by firms like Intel, Samsung, and Taiwan Semiconductor Manufacturing Company, are utilized in supercomputers, cellphones, artificial intelligence, and the most sophisticated military gear. By the end of the decade, the US would be able to create around 20% of the most sophisticated logic chip kinds worldwide, according to Ms. Raimondo, who announced the increased federal investments. It currently yields zero, according to her.


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